Hefty U.S. tariffs on some Canadian products took effect on Saturday after days of negotiations that went down to the wire failed to produce an agreement.
Canadian Prime Minister Mark Carney vowed that his country will match the U.S. tariffs “dollar for dollar to protect our workers and businesses,” as officials said late Friday that Washington and Ottawa had not managed to strike a deal.
The lack of a final agreement means that new 50 percent duties impacting some $20 billion worth of goods, or 5.5 percent of Canadian exports to the United States, came into force.
Impacted products range from hockey sticks to cement.
U.S. Trade Representative Jamieson Greer said Friday that “tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week.”
That came despite Washington’s offers for tariff reductions in sectors like steel and aluminum, he added in a statement.
A senior U.S. official said there are no further scheduled meetings for now.
The surprise announcement came after Trump said that the United States “should be able to have a deal with Canada,” citing his “good relationship” with Carney.
After hours of trade talks on Friday, however, Canada’s top negotiator Dominic LeBlanc told reporters that officials still “have more work to do.”
LeBlanc and Greer also met for around three hours on Thursday.
Greer said that the Trump administration put on the table “significant tariff reductions on steel, aluminum, autos and lumber” in exchange for concessions from Canada.
He said that Canada was also maintaining its “prolonged retaliation” against the United States, including prohibitions on certain American goods and services.
Canada’s regional leaders said previously that the United States was particularly irritated by one retaliatory measure: the removal of U.S. alcohol and wine from liquor stores.
But Carney added in a separate statement that “last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
While Washington and Ottawa made “important progress” in recent weeks, Carney said, this “has not been enough to meet our objectives for Canadians.”
The senior U.S. official, who spoke on condition of anonymity, said Canada had sought additional concessions that the United States was unable to provide.
But they added that talks were candid and not acrimonious.
‘Significant pressure’
Ryan Majerus, a former U.S. commerce official, told AFP that “if Canada has agreed to also impose retaliatory tariffs, that will make deescalating this a lot harder.”
“But I think both sides will face significant pressure in the coming days to find an off-ramp,” added Majerus, a trade lawyer with King & Spalding.
Christopher Padilla, another former U.S. official who is now with Brunswick Group, told AFP there has been “a lot of hope among businesses on both sides” for a deal to “turn the page on what has been a very difficult eighteen months in the US-Canada relationship.”
The White House had alleged “discriminatory treatment” by Canada against U.S. alcohol, automobile and dairy products in introducing the duties.
They were originally set to take effect on Wednesday, before Trump issued a last-minute delay of three days, citing major progress in talks.
Canadian negotiators had been camped out in Washington this week to firm up a deal that aimed to address various flash points.
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.
Carney has repeatedly told Canadians that relations with the United States have been forever changed, regardless of what happens with an individual trade deal.
He says the country must diversify and reduce its reliance on the United States, which currently accounts for roughly 70 percent of Canadian exports.
Beyond the latest tariffs, the United States 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.
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