Canada retaliates as trade war with US escalates

Canadian Prime Minister Mark Carney announced retaliatory tariffs on the USon Saturday, after walking away from a “bad deal” on trade in a deepening rift between the longtime allies.

Negotiations between the neighboring countries broke down Friday in Washington, putting into force new 50% US tariffs impacting about US$20 billion worth of goods, or 5.5% of Canadian exports to the United States.

Impacted products range from hockey sticks to cement.

“You’re at war when you get attacked. We got attacked,” Carney said.

US President Donald Trump had said Washington “should be able to have a deal with Canada,” citing his “good relationship” with Carney.

But on Saturday, Canada’s prime minister said Trump set conditions that were ultimately unacceptable even though earlier talks had been positive.

“In recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,” Carney said in Ottawa.

“We cannot accept what they’ve offered, and we will not give what they’ve asked.”

New Canadian tariffs will notably target the US steel and dairy industries and take effect on Sept 8. More details would come next week, Carney said.

A senior US official characterised this week’s talks in Washington as candid and not acrimonious.

US trade representative Jamieson Greer told Fox News on Saturday that Washington was “moving forward with measures that respond to Canadian retaliation.” He also said no new talks were planned with Canadian negotiators.

‘Significant pressure’

Canada has been seeking relief from Trump’s tariffs on autos, steel and aluminum, which have battered the country’s economy, forced job losses and strained what was once an iron-clad trade relationship.

The White House had alleged “discriminatory treatment” by Canada against US alcohol, automobile and dairy products in introducing the duties.

They were originally set to take effect Wednesday, before Trump issued a three-day reprieve citing progress in talks.

Carney said one reason the deal collapsed was US negotiators at the 11th hour introducing of restrictions on Canadian trade deals with other countries.

US negotiators also made unacceptable “threats” to the French language and “Quebec culture,” he said, referring to the French-speaking province in eastern Canada.

The escalating trade war was met with anger by Democratic lawmakers and governors from border states including Minnesota, New York and Washington, blaming Trump for triggering chaos that will raise costs on US businesses and families.

“Needlessly picking fights with our allies and raising prices here at home. That’s Trump’s economic policy in a nutshell,” New York governor Kathy Hochul posted on X.

Beyond the latest tariffs, the US and Canada still have to agree on revisions to the North American free trade agreement, USMCA, which Trump declined to renew in its current form.

Trump’s threats to make Canada the 51st US state have also antagonized Canadians.

Lunch money

Carney has repeatedly said relations with the US have been forever altered, and that Canada must reduce reliance on its southern neighbor, which currently accounts for roughly 70% of Canadian exports.

“We’ve been under no illusions. We recognised from the start that America has changed,” Carney said Saturday. “We recognise that sometimes, its signature was written in pencil.”

Carney spoke with provincial leaders to outline next steps.

One of them, Ontario premier Doug Ford, said Canadians must remain united.

Trump “can’t be trusted, simple as that,” Ford told reporters. “President Trump is the type of person who would steal your lunch money.”

The Business Roundtable, a group of 200 chief executives of leading US corporations, warned the new tariffs “risk raising costs for American businesses and families,” and urged both governments to resume negotiations.

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