The United States began applying 50 percent tariffs to about $20 billion worth of Canadian goods on Saturday 22 August, after negotiations between Washington and Ottawa failed to produce an agreement before a midnight deadline, according to reports from AFP and NPR. CBC and Al Jazeera likewise reported that the 50 percent duties took effect just after midnight on Saturday, after talks in Washington failed to produce a deal.
AFP reported that the duties affect roughly 5.5 percent of Canadian exports to the United States, with products ranging from hockey sticks to cement. NPR said some dairy products and alcoholic beverages are also covered, and that U.S. Customs and Border Protection told importers it would enforce the new rates immediately after the deadline passed.
Two Accounts of the Breakdown
US Trade Representative Jamieson Greer said in a statement shortly after midnight that Canada had declined to finalise the deal on the terms agreed earlier in the week, NPR reported. He said Washington had offered significant tariff reductions on steel, aluminium, autos and lumber. According to Greer, the package would also have covered aerospace supply-chain coordination, critical minerals cooperation, tougher enforcement against imports made with forced labour, and the announcement of formal negotiations on the United States-Mexico-Canada Agreement (USMCA). AFP reported that he also pointed to Canada’s continuing retaliation against US goods and services.
Prime Minister Mark Carney blamed the US side. In a statement on Friday night he said important progress had been made in recent weeks but had not been enough to meet Canada’s objectives, and that “last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal,” NPR reported. Canada’s chief negotiator, Dominic LeBlanc, told reporters on Friday that officials still had “more work to do,” according to AFP, which also quoted a senior US official as saying no further meetings were scheduled for the time being.
Canada Prepares to Respond
Carney said Canada would match the US tariffs “dollar for dollar”, according to AFP. NPR reported that Canada’s retaliatory tariffs are due to take effect on 8 September, the Tuesday after Labour Day, and will focus on sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. The government said it would release details in the coming days.
Why It Matters
On AFP’s figures, the new duties touch a defined slice of Canada’s exports rather than the whole trade relationship, but exporters and importers in the affected sectors now face higher costs on one side of the border and the prospect of Canadian counter-measures on the other. The two governments have given different explanations for why the deal was not finalised, and a senior US official said no new meetings were planned. Greer’s description of the offer also shows that the future of the USMCA was part of the discussion.
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