The United States imposed 50 percent tariffs on 20 billion dollars worth of Canadian exports on Saturday after trade negotiations between the two long-standing North American allies collapsed.
The new duties took effect immediately after midnight, or 06:00 Kyiv time, following multi-day talks in which Washington and Ottawa accused each other of causing the breakdown.
The tariffs cover a wide array of Canadian products, including wooden hockey sticks, an item rarely used in modern ice hockey. Although the levies target roughly 20 billion dollars in goods, they cover just over 5 percent of Canada's total exports to the United States and are not expected to cause an immediate economic collapse for America's largest trading partner after Mexico.
The sudden breakdown escalates diplomatic tensions between US President Donald Trump and Canadian Prime Minister Mark Carney. The disagreement also complicates broader efforts to update the trilateral free trade agreement between the United States, Mexico, and Canada, known as the USMCA.
Ottawa halts trade negotiations and vows retaliation
Canadian Prime Minister Mark Carney responded to the American tariffs by announcing an immediate suspension of trade talks and promising that Canada would retaliate against the United States dollar for dollar.
Carney said he instructed Canadian negotiators to return to Ottawa after they worked hard and in good faith to protect national interests until the final minute. He added that last-minute alterations to the terms proposed by Washington were unfair, uneconomic, and cast doubt on the reliability of any future agreement.
Carney, a former governor of both the Bank of Canada and the Bank of England before taking political office, maintains strong domestic popularity. Recent public opinion polls indicate that a majority of Canadians strongly oppose making economic concessions to the Trump administration.
The collapse came abruptly, as negotiators from both nations had appeared close to securing a compromise just hours earlier. Sources told Reuters that the proposed agreement would have lowered duties on steel, aluminium, and automobiles, while potentially allowing American alcoholic beverages back onto Canadian store shelves.
Washington blames Canada for rejected compromise
US Trade Representative Jamieson Greer offered a sharply contrasting account during a White House press briefing, stating that Canada had refused to finalize a trade deal on terms previously agreed upon earlier in the week. Greer described the decision as a missed opportunity for Canada to strengthen its economic partnership with the United States, which he highlighted as the fastest-growing economy among the Group of Seven nations.
The Group of Seven, or G7, is an intergovernmental political and economic forum consisting of seven major advanced economies, including the United States, Canada, the United Kingdom, France, Germany, Italy, and Japan.
A senior official in the Trump administration said the proposed US framework would have granted Canada the most favorable tariff terms of any major exporter to America. However, the official stated that Canadian negotiators insisted on securing additional concessions regarding steel, aluminium, automobiles, and softwood lumber.
The administration official confirmed that no further negotiations between Washington and Ottawa are currently scheduled while the new US tariffs are being implemented.
Rising diplomatic tensions and military planning
The implementation of duties follows months of escalating trade threats from Washington. Last month, President Trump threatened to impose tariffs on a broad range of Canadian imports, including wine, furniture, dairy products, cement, clothing, fishing tackle, and hockey equipment.
Earlier in January, Trump issued another ultimatum to Ottawa, threatening to hit Canadian goods with 100 percent tariffs if Canada concluded a bilateral trade agreement with China.
In response to the deteriorating bilateral relationship and repeated tariff threats, the Canadian military took the unusual step of developing a defense model to simulate a hypothetical invasion of Canada by the United States military and prepare potential defense responses.
