Canadian Prime Minister Mark Carney promised that his country would respond to US tariffs “dollar for dollar, in order to protect our workers and businesses.”
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This happened after officials from the two countries announced on Friday evening that Washington and Ottawa had failed to reach an agreement.
Due to the lack of a final agreement, new 50% tariffs came into effect, affecting goods worth about $20 billion (17.11 billion euros), or 5.5% of Canada’s exports to the US.
The range of affected products varies from hockey sticks to cement.
US Trade Representative Jamieson Greer said on Friday that “today Canada refused to finally approve the trade agreement under the terms agreed this week.”
He added that this happened despite Washington’s offers to reduce tariffs in the steel and aluminum sectors.
A senior US official indicated that no further meetings are currently scheduled.
The unexpected announcement came after D. Trump stated that the US “should be able to reach an agreement with Canada,” mentioning his “good relations” with M. Carney.
However, after several hours of trade negotiations on Friday, Canada’s chief negotiator Dominic LeBlanc told reporters that officials still “have more work to do.”
D. LeBlanc and J. Greer also met on Thursday.
J. Greer said that the Trump administration made an offer for a “significant reduction of tariffs on steel, aluminum, cars, and lumber” in exchange for Canadian concessions.
He emphasized that Canada also maintained its “long-term response” to the US, including bans on certain American goods and services.
Canadian regional leaders earlier said that the US was particularly upset by one retaliatory measure: the removal of American alcohol and wine from liquor stores.
However, M. Carney added in a separate statement that “last-minute changes to the terms proposed by the US were unfair, economically unjustified, and raised doubts about the reliability of any agreement.”
Although Washington and Ottawa have made “significant progress” in recent weeks, M. Carney said that it was “not enough to achieve our goals for Canadians.”
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A senior US official who wished to remain anonymous said that Canada sought additional concessions that the United States could not provide.
However, he added that the negotiations were open and non-confrontational.
“Great pressure”
Former US trade official Ryan Majerus told AFP news agency that “if Canada also agreed to impose retaliatory tariffs, it would be much harder to de-escalate this situation.”
“But I think both sides will face great pressure to find a way out in the coming days,” added R. Majerus, a trade lawyer from King & Spalding.
Christopher Padilla, another former US official now working at Brunswick Group, told AFP that among business representatives on both sides “there was much hope” that an agreement would be reached and “to turn the page after a very difficult last eighteen months in US-Canada relations.”
The White House, by imposing tariffs, said that Canada was engaging in “discriminatory behavior” against American alcohol, cars, and dairy products.
Initially, they were to take effect on Wednesday, but D. Trump postponed them for three days at the last minute, citing significant progress in negotiations.
Canadian negotiators stayed in Washington this week to finalize an agreement that would resolve various contentious issues.
Canada sought relief from tariffs imposed by D. Trump on cars, steel, and aluminum, which hurt the country’s economy, led to job losses, and strained once strong trade relations.
M. Carney repeatedly emphasized to Canadians that relations with the US have changed forever, regardless of what happens with the specific trade agreement.
He says the country must diversify its economy and reduce dependence on the US, which currently accounts for about 70% of Canadian exports.
Besides the new tariffs, the US and Canada still need to agree on amendments to the North American Free Trade Agreement (USMCA), which D. Trump refused to extend in its current form.
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