The United States has imposed 50 per cent tariffs on around $20 billion worth of Canadian goods after trade negotiations between the two countries failed to reach an agreement.
The new tariffs, which took effect shortly after midnight, cover products such as wooden hockey sticks and account for just over 5pc of Canada’s exports to the US.
Although the measures are unlikely to significantly affect the overall Canadian economy, they have heightened tensions between US President Donald Trump and Canadian Prime Minister Mark Carney and could complicate negotiations on renewing the US-Mexico-Canada free trade agreement.
Carney announced that Canada was suspending trade talks with Washington and would respond to the new tariffs on a “dollar-for-dollar” basis.
“Last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal,” Carney said.
The announcement came after both sides appeared close to an agreement that could have reduced tariffs on Canadian steel, aluminium and automobiles and potentially restored US alcohol products to Canadian liquor stores.
US Trade Representative Jamieson Greer said Canada had declined to finalise the deal under terms agreed earlier in the week, calling it a “missed opportunity” for Ottawa.
A senior Trump administration official said Washington had offered Canada favourable tariff terms but Ottawa sought further concessions, particularly on steel, aluminium, automobiles and softwood lumber.
No further negotiations have been scheduled as the new duties take effect.
The latest tariffs add to existing US duties on Canadian steel, lumber and automobiles, sectors that have already faced significant pressure over the past 18 months.
