Canada halts US trade talks as 50% tariffs take effect

WASHINGTON, D.C.: The United States began imposing 50 percent tariffs on some US$20 billion of Canadian goods on August 22 after Washington and Ottawa failed to reach a trade agreement following days of negotiations. The tariffs took effect just after midnight (0400 GMT) and cover goods including wooden ice hockey sticks. The affected products account for just over five percent of Canada's exports to the United States, its largest trading partner after Mexico. The move increases tensions between U.S. President Donald Trump and Canadian Prime Minister Mark Carney and is likely to make broader negotiations over renewing the U.S.-Mexico-Canada free trade agreement more difficult. Carney said Canada would retaliate "dollar for dollar" against the new tariffs and announced the suspension of trade negotiations with Washington. "I have decided to suspend trade negotiations with the U.S. and have directed Canada's negotiators to return to Ottawa," Carney said in a statement. "They (negotiators) have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute," he said. "However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal." U.S. Trade Representative Jamieson Greer blamed Canada for the failure to reach an agreement. "Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week," Greer said during a White House briefing. "This is a missed opportunity for Canada to partner with the United States, which is the fastest-growing economy in the G7," he said. A senior Trump administration official said the U.S. offer would have put Canada in the best tariff position of any major exporter to the United States, but Canada sought additional concessions, particularly on steel, aluminum, autos and softwood lumber. No additional talks are scheduled as the United States implements the new duties, the official said. Trump last month threatened tariffs on a range of Canadian imports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment. The new duties do not qualify for preferential treatment under the U.S.-Mexico-Canada free trade agreement. Trade experts have said the tariffs could severely damage some already vulnerable sectors, potentially leading to job losses and business closures. The U.S. decision followed three days of talks in Washington between Canada's minister responsible for trade with the United States, Dominic LeBlanc, and Greer. The new duties come on top of existing U.S. tariffs on Canadian steel, lumber and autos, sectors that have taken a major hit over the past 18 months, although the impact has been largely contained within those industries.