The United States is set to impose 50% tariffs on $20 billion worth of Canadian products early Saturday after last-ditch negotiations failed to resolve the latest strain in already tense relations between the historic allies.
President Donald Trump’s import taxes will hit about 5% of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days,” U.S. Trade Representative Jamieson Greer said in a statement read to reporters on a press call shortly before midnight.
Canadian Prime Minister Mark Carney responded, “Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
Carney said his government would announce additional support for Canadian workers and businesses in the coming days.
Greer said the U.S. offer was “forward-looking” and included “a historic economic and national security partnership.”
The political impact will likely be even bigger than the economic fallout. The countries sold each other $880 billion worth of goods and services last year.
The tariffs were initially supposed to kick in at 12:01 a.m. Wednesday. But Trump extended the deadline for three days to allow talks to continue, but the two countries still could not reach an agreement in time.
The two countries have wrangled for decades over trade, poking each other over sore spots like Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market.
Somehow, they still managed to remain friends, allies and trading partners. Canadian soldiers fought alongside Americans in Afghanistan after 9/11. The 5,525-mile U.S.-Canada border is undefended, and nearly 330,000 people and $2 billion worth of goods cross it every day; 800,000 Canadians live in the United States.
Trump’s approach to dealing with Canada marks an extraordinary departure from the traditionally cooperative relationship between the two countries. Trump has hit Canadian goods with tariffs — in a push to bring manufacturing back to the United States — and has repeatedly made inflammatory comments about turning Canada into America’s 51st state.
The Canadian public is fed up. A petition to expel the U.S. ambassador, a Trump ally, has collected nearly 248,000 signatures since July 21. It accuses Ambassador Pete Hoekstra of having “normalized’’ Trump’s talk of annexing Canada, among other things.
Nearly 72% of Canada’s goods exports last year went to the United States. And the Trump administration might be wary of imposing a hefty new tariff — paid by U.S. importers who try to pass along the cost to consumers via higher prices — ahead of November’s midterm elections. American voters are already frustrated with the high cost of living.
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