Kathmandu: Trade tensions between the United States and Canada have intensified after the latest attempt to reach a trade agreement failed. The United States has imposed a new 50% tariff on Canadian goods worth around $20 billion, prompting Canada to announce retaliatory measures.
Canadian Prime Minister Mark Carney said in an address to the nation on Saturday that Canada would respond to the US tariffs on a “dollar-for-dollar” basis. The retaliatory tariffs are scheduled to take effect from September 8.
Carney described the new US tariffs as a “major miscalculation” and accused Washington of trying to weaken Canada economically and divide the country. He said the two countries were now facing a situation resembling a “trade war.”
Canada plans to impose retaliatory tariffs on a range of US products, including steel, electronics, dairy products and household appliances. The Canadian government has also said it will announce additional measures to support workers and businesses affected by the US tariffs.
Which Goods Are Affected by the New US Tariffs?
The new 50% US tariff applies to Canadian goods worth approximately $20 billion. Products affected include alcoholic beverages, dairy products, cement, clothing, hockey equipment, certain electronic goods and paper products.
However, some major Canadian exports, including energy, potash and fish, have been excluded from the new tariffs. Existing US tariffs on steel, aluminum, automobiles and lumber will remain in place.
Trade Talks Collapse at the Final Stage
The US and Canada had been engaged in intensive negotiations over a trade agreement in recent weeks. On August 18, Carney said significant progress had been made in the talks. The United States subsequently delayed implementation of the 50% tariff until August 21.
However, the two sides failed to reach an agreement during the final stage of negotiations. Canada accused the US of introducing additional and unfair conditions at the last minute, while Washington has defended the new tariffs by alleging that Canada discriminates against American goods.
Concerns Over Impact on Long-Standing Trade Ties
The United States and Canada have long been close economic and political partners. However, tensions over tariffs have steadily strained their trade relationship in recent years.
The latest 50% tariff and Canada’s planned retaliation could put further pressure on cross-border trade, industries and consumer prices, raising concerns about the broader economic impact.
Carney said Canada would work to reduce its dependence on the United States and expand trade relations with other countries. He said Canada had already begun pursuing more than 20 new economic and security partnerships.
US President Donald Trump has not yet publicly responded to Carney’s latest remarks following the collapse of the trade talks. No clear timetable has been announced for the two countries to resume negotiations.
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