US-Canada trade talks have collapsed, triggering a 50% tariff on billions of dollars of Canadian goods as tensions between the two North American trading partners escalate.
The new duties took effect at 12:01 am Saturday on hundreds of Canadian products, including plywood, liquor, electrical equipment and hockey gear. The measures affect about US$20 billion of imports and come after weeks of negotiations failed to produce an agreement.
The talks had appeared close to a deal before breaking down. Negotiators had discussed cutting tariffs on Canadian steel and aluminium to 25% and reducing duties on Canadian-built vehicles to 15%. Those proposals failed to secure a final agreement.
Bloomberg reported that the breakdown came after last-minute negotiations between officials from both countries, ending efforts to avert the higher tariffs.
Canada has said it will respond with dollar-for-dollar retaliation, raising the prospect of a broader trade confrontation. Prime Minister Mark Carney also criticised the latest US demands, while Washington blamed Ottawa for failing to resolve outstanding trade disputes.
The escalation adds further uncertainty for businesses operating across the US-Canada supply chain and puts renewed pressure on the future of the countries’ wider trade relationship.
