US heavy tariffs on some Canadian products have officially taken effect, after days of negotiations that lasted until near the deadline without reaching an agreement, according to AFP on August 22.
Canadian Prime Minister Mark Carney declared that the country will respond commensurately "one by one to protect our workers and businesses", after officials from both sides announced that Washington and Ottawa could not reach an agreement.
The lack of a final agreement means that a new 50% tariff is officially applied, affecting a volume of goods worth about 20 billion USD, equivalent to 5.5% of Canada's exports to the US. Affected products range from hockey bats to cement.
US Trade Representative Jamieson Greer said: "Tonight, Canada refused to complete the trade agreement according to the terms agreed earlier this week." According to him, it happened despite Washington's proposal to reduce tariffs in sectors such as steel and aluminum.
A senior US official said that no further meetings have been scheduled yet.
The surprise announcement was made after Mr. Trump said that the US "should have reached an agreement with Canada", citing his "good relationship" with Prime Minister Carney. However, after hours of negotiations, Canadian chief negotiator Dominic LeBlanc told reporters that officials on both sides "still have much to do". Previously, Mr. LeBlanc and Mr. Greer had a meeting lasting about 3 hours.
Mr. Greer said that the Trump administration has put on the negotiating table a proposal to "significantly reduce tariffs on steel, aluminum, automobiles and sawn timber" in exchange for concessions from Canada. According to him, Canada still maintains "prolonged retaliation" against the US, including a ban on some of its goods and services. Leaders of Canadian states have said Washington is particularly uncomfortable with a retaliation measure: withdrawing strong liquor and US wine from stores.
For his part, Prime Minister Carney affirmed that "the last-minute changes in the terms proposed by the US are unfair, economically unreasonable and question the credibility of any agreement". He noted that the two sides have made "significant progress" in recent weeks, but that "is still not enough to meet our goals for the people of Canada".
When announcing the tariffs, the White House accused Canada of "discriminatory treatment" of US alcohol, cars and dairy products. This tariff group was originally expected to take effect from midweek, before Mr. Trump postponed it for 3 days at the last minute on the grounds that negotiations had made great progress. Canadian negotiators have been on duty in Washington throughout the past week to finalize an agreement to address many bottlenecks.
Besides the new tax group, the US and Canada still have to agree on amending the North American Free Trade Agreement (USMCA), a document that Mr. Trump refused to extend in the current form.
