US imposes 50% tariff on Canadian goods as talks fail
What's the story
The United States has imposed a 50% tariff on billions of dollars worth of Canadian goods after last-minute trade talks between the two nations collapsed. The new tax will be levied on some $20 billion worth of Canadian products, including wine, hockey sticks, and cement. The move comes as President Donald Trump had initially set a Wednesday deadline for an agreement but later extended it to Saturday due to positive negotiations.
Tax rationale
New tariff aimed at addressing 'substantial retaliation'
The new tariff is aimed at addressing Canada's "substantial retaliation" and "discrimination" against American products and businesses, Trump administration officials said.
However, there are exemptions for energy and essential goods like fish and critical minerals.
The tariff was first announced last month after Trump and Canadian Prime Minister Mark Carney were seen chatting during the World Cup final in New Jersey.
Negotiation details
Canada wanted US to reduce tariffs on automobiles, other goods
Ahead of the deadline, Canada had asked the US to reduce tariffs on automobiles and other goods.
Ottawa wanted the tariff on Canadian-built vehicles reduced from 25% to 15%, and the levy on Canadian steel and aluminum cut in half to 25%.
"We have more work to do. We are going to continue working up until the last minute," Canada's Minister of Internal Trade Dominic LeBlanc said on Friday.
Trade tensions
Failure to reach agreement strains US-Canada trade relations
The failure to reach an agreement has strained US-Canada trade relations, which accounted for nearly $900 billion in goods and services last year.
The Trump administration had been pushing Canada to lift retaliatory measures imposed after Trump's tariffs last year, including bans on US liquor and duties on US automobiles.
"If a country retaliates against us, we're obviously not going to tolerate that," Greer said last week.