Canada to retaliate with tariffs starting September 8
OTTAWA, Aug. 22 (Reuters) - Prime Minister Mark Carney said on Saturday that Canada would impose tariffs starting September 8 on imports of U.S. steel, electronics and other products in retaliation for President Donald Trump's 50% tariffs that took effect at midnight.
After days of intense negotiations, the two countries did not reach a trade deal late Friday, worsening a delicate relationship between the longtime trade partners and allies and complicating the future of the continental free trade pact known as the U.S.-Mexico-Canada Agreement.
Deal talks stalled over U.S. demands and vehicle terms
But Carney said the U.S. administration's last-minute demands halted progress.
"In recent days, the U.S. proposed new terms that were uneconomic, unfair, and undermined the net benefits to Canada, calling into question the reliability of any deal," he said, adding these demands included curtailing Canada's ability to forge new trade deals.
Carney said Canada would announce support measures next week for industries hit by the new U.S. duties, adding these measures could last years.
U.S. Trade Representative Jamieson Greer told Fox News on Saturday that no new talks are planned with Canada.
The new U.S. tariffs cover around 5% of Canada's exports to the U.S. They could expose some vulnerable industries such as softwood lumber and wine to severe damage and lead to job losses and business closures, trade experts have said.
Ontario Premier Doug Ford supported Carney's decision to retaliate.
One of the main sticking points was the treatment of larger vehicles. Three sources said Canada wanted favorable tariff terms proposed for light-duty vehicles to extend to medium- and heavy-duty trucks, something the U.S. resisted. Carney said the U.S. position would have excluded Canadian-made models, including Ford's F-350, F-450 and F-550 trucks and General Motors' Silverado, making Canadian production less competitive.
There were also U.S. proposals that affected Canadian culture, language and sovereignty, Carney said, without elaborating.
U.S. tariffs hit about $20 billion of Canadian exports
Trump's new tariffs hit sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment, and cover some $20 billion of Canadian exports to the U.S. These duties do not exempt Canadian products under the USMCA, which has shielded most Canadian exports to the U.S. in the last 18 months.
"Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses," Carney told a press conference.
"You're at war when you get attacked. We got attacked," Carney said when asked a question about whether Canada was engaged in a trade war.
Canada targets steel, dairy, appliances and electronics
Carney said Canada will impose tariffs on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, along with some products the U.S. previously targeted in Canada. The government will release details on its response in the coming days.
"We cannot accept what they have offered, and we will not give what they have asked," Carney said.
Trump had expressed hope that a deal with Canada could happen on Friday.
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