US-Canada trade talks collapsed on Friday, triggering new 50% US tariffs on a range of Canadian goods and a matching "dollar-for-dollar" retaliation from Ottawa starting September 8. The breakdown has reopened doubts over the USMCA trade pact.
Trade talks between the United States and Canada broke down late on Friday, and Washington responded by imposing 50% tariffs on about $20 billion of Canadian goods. According to the Guardian, President Donald Trump said "Canada wants the benefits of being a State, without being one" in his first public comments since the collapse.
Canadian Prime Minister Mark Carney called the move a "miscalculation" and confirmed Canada will match the tariffs dollar-for-dollar from September 8, with new levies on steel, dairy, appliances and electronics. He described the two countries as being in a trade war, telling reporters in Ottawa the US had "attacked" and that Canada would not accept the terms on offer.
Tariffs hit a narrow slice of trade
The new US tariffs cover roughly 5% of Canadian imports, including wine, dairy, cement, clothing and hockey equipment, on top of existing US tariffs on Canadian steel, aluminium, automobiles and lumber. Small as the scope is, the Canadian Federation of Independent Business estimated that 40% of small Canadian exporters will be directly hit, with nearly a third expecting revenue drops of 50% or more.
Both sides blame the other for the failure. US trade representative Jamieson Greer said there are no plans to resume talks, while Carney said the US presented "unacceptable" terms that would have curbed Canada's ability to strike other trade deals.
USMCA renewal now in doubt
The collapse also clouds the mandatory review of the USMCA, the North American trade pact that underpins $1.6 trillion in annual trilateral trade between Canada, the US and Mexico. Canada and Mexico had formally asked for the pact to be renewed for another 16 years, but the US declined to renew it in its current form. Asked how the talks collapse would affect USMCA, Carney said it was "certainly not good news".
Opposition leader Pierre Poilievre called the new US levies "unjustified", and several provincial premiers backed the prime minister's response. Details of Canada's retaliatory measures are due in the coming days.
Sources: BBC News, Business | The Guardian
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