Canada is set to announce retaliatory tariffs against the United States on Tuesday, as relations between the neighbors nosedived following failed trade talks last week.
Here’s what you need to know:
- Washington and Ottawa were racing to reach an agreement beforeUS President Donald Trump’s steep new US tariffs, announced in July, were due to take effect
- Talks broke down days after the US President announced the neighbors were close to agreeing to a trade deal
- The collapse in negotiations triggered Trump’s threatened 50% tariffs on about $20 billion worth of Canadian goods the next day
- Canada moved to announce its own retaliatory tariffs effective September 8
Why is Canada imposing new tariffs?
While the US and Canada have shared one of the world’s largest trade relationships, the recent talks signal a breakdown in relations.
“An attitude at the negotiation table that Canada is a subsidiary of the United States” is “not something we’re going to accept,” Canadian Prime Minister Mark Carney said.
“We learned during the negotiations that the Americans want to destroy our major industries, including autos, steel and aluminum,” Carney said, opting for an even blunter approach in French. “That was one of the main reasons we said no. It was a bad deal.”
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Finance Minister Francois-Philippe Champagne and three other Cabinet ministers are expected to unveil Canada’s response on Tuesday.
What did the US say?
Trump, on Monday, threatened he would impose a 50% tariff on Canadian automobiles, car parts and steel from January 1, 2027, and took to social media to unleash a tirade against the historic partner.
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“On trade, and in other ways, also, they are among the worst nations in the world to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!” the US president said.
Canada relies heavily on the US as its top trading partner, with American-bound exports making up 70% of the country’s total. The relationship runs both ways, too: government data shows Canada was the second-largest US trading partner in goods this year, just behind Mexico.
No further negotiations are currently scheduled.
Edited by: Rob Turner
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