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US-Canada Trade Talks Collapse, Triggering Tariff 'War'
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BBC World54 minutes agoPolitics3 min read

US-Canada Trade Talks Collapse, Triggering Tariff 'War'

New 50% US tariffs on Canadian goods; Canada to retaliate 'dollar-for-dollar'

Quick Look

  • US-Canada trade talks collapsed, leading to new 50% US tariffs on $20bn of Canadian goods.
  • Canada will retaliate with matching tariffs from September 8, escalating a trade war between the two nations.

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Why It Matters

The US and Canada have a deeply integrated trade relationship, with the collapse of talks marking a significant escalation in their trade dispute.

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US President Donald Trump has said Canada wants "the benefits of being a State, without being one" after trade talks between the two countries collapsed late on Friday. His comments come after negotiations broke down, triggering new 50% US tariffs on a range of Canadian goods, Trump also said American farmers had been charged "massive amounts of Tariffs" for years. Canadian Prime Minister Mark Carney called the fresh tariffs a "miscalculation" designed to "hurt and divide us". Carney confirmed he would match Trump's tariffs "dollar-for-dollar" from 8 September, including levies on steel, dairy, appliances and electronics. The US and Canada are now in a trade "war", he said. "They asked too much and they offered too little," Carney said on Saturday. "You're at war when you get attacked. We got attacked," he added. Trump's latest comments echo his repeated references to making Canada the "51st state" of America since returning to office, sparking frustration among its leaders and residents. The collapse of the trade talks upended a deeply integrated trading relationship, with no clear path to resolution. "We cannot accept what they've offered, and we will not give what they've asked," Carney said. On Sunday, while speaking to Fox News, Trump said the Canadians were "foolish" to engage in a trade war with the US and think they will "actually win". Both countries were optimistic of a deal earlier in the week, but talks fell apart after both sides accused the other of making last-minute changes. The new 50% US tariffs will apply to a range of Canadian goods, in addition to existing US tariffs on Canadian steel, aluminium, automobiles and lumber. They are limited in scope, covering about $20bn (£15bn; C$28bn) of Canadian imports, or about 5% in total, including wine, dairy, cement, clothing and hockey equipment. The prime minister said Canada was retaliating "reluctantly" to protect its interests. Details of the counter-measures will be released in the coming days, he said. Leaders of other federal parties in Canada, including the Conservative opposition, voiced support for the prime minister, as have the leaders of some Canadian provinces. Tariffs - a tax placed on imports from other countries - have been a key component of Trump's trade policy, with the US president arguing they will boost American manufacturing and create jobs at home. Critics, however, say tariffs have raised prices for American consumers and have disrupted and damaged the global economy. Carney's speech on Saturday was his first address to Canadians after he announced late on Friday night that a deal would not be reached, accusing the Americans of making "last-minute changes" that were "unfair" and "uneconomic". US negotiators, meanwhile, accused Canada of making "new demands and walk backs" on terms which had been previously agreed. On Saturday, US trade representative Jamieson Greer told Fox News there were no plans to resume talks. He added that the US had been prepared to cut some of its tariffs on Canada as part of the ill-fated deal. Carney, however, said the US presented "unacceptable" terms that were too restrictive, including curbing Canada's ability to strike new trade deals with other countries. He also rejected the assertion that Canada had made last-minute requests: "We clarified what was on offer and were continually disappointed by the answers."

What to Watch

AI outlook — possibilities, not facts

  • Further escalation in tariffs before potential negotiations resume

    Likely · Within weeks

Open Questions

  • What are the full details of Canada's counter-measures?
  • Will negotiations resume?

Related Topics

This article was originally published by BBC World.

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