Summary
- The US imposed 50% tariffs on about $20 billion of Canadian goods, pushing the two North American countries into a full-scale tariff war.
- Canada said it would answer with retaliatory tariffs of the same scale on US steel, dairy products, home appliances, agricultural machinery and pulp, saying the two sides are now at war.
- There are no plans to resume US-Canada talks, and uncertainty is rising for bilateral trade and related industries as tariffs escalate on both sides and a boycott of US products spreads.
US and Canada descend into a full-scale tariff war
US imposes 50% tariffs on $20 billion of Canadian goods
Canadian prime minister says ‘we are at war’ and vows retaliation
Trade talks between the US and Canada have collapsed, pushing the two North American countries into a full-scale tariff war. After Washington imposed an additional 50% tariff on Canadian products, Ottawa said it would retaliate with measures of the same scale. President Donald Trump also renewed pressure on Canada after the breakdown, again invoking the idea of the country becoming the “51st state.”
On Aug. 23, Trump wrote on Truth Social that Canada “wants the benefits of being a state without being a state.”
He added that Canada had imposed steep tariffs on “our great farmers” for years. “No more,” Trump wrote.
It was his first public response since last-ditch trade talks between the two countries fell apart on Aug. 21.
After negotiations broke down, the US followed through on its threat to impose additional tariffs on Canada. Effective at midnight on Aug. 22, Washington applied 50% tariffs to about $20 billion of Canadian goods, adding to existing high duties on products including steel, aluminum and automobiles. The new list covers dairy products, beer and wine, apparel, cement, furniture, machinery and ice hockey equipment. That is roughly 5% of all goods the US imports from Canada.
The two sides are blaming each other for the collapse in talks.
Canada says the US continued to press demands that were difficult to accept until the final stage of negotiations.
Prime Minister Mark Carney said Washington challenged domestic Canadian policies including support for French-language content on online streaming platforms, subsidies for cultural industries and mandatory French-language labeling on packaging. The Canadian government also says the US sought restrictions on Canada’s ability to strike new trade agreements with third countries. Carney called those terms “unacceptable.”
The US, for its part, says Canada introduced new demands late in the negotiations and scuttled a deal. US Trade Representative Jamieson Greer told Fox News that Canada was already receiving more favorable treatment than other countries exporting to the US. He also said Washington had proposed ways to reduce Canada’s burden from national-security tariffs on steel, automobiles and lumber, but Canada did not want that arrangement.
Further talks do not appear imminent. Greer said no new negotiations are scheduled and that the US is reviewing ways to respond to any Canadian retaliation.
Canada has also signaled it will not back down. In a national address on Aug. 22, Carney said the country is “at war” with the US.
“If you are under attack, you are at war, and we have been attacked,” he said.
The Canadian government plans to impose retaliatory tariffs from Sept. 8 on US steel, dairy products, home appliances, agricultural machinery and pulp. Ottawa said the measures would match the scale of the tariffs imposed by Washington.
Trump’s renewed comments about absorbing Canada into the US immediately after the talks collapsed have deepened tensions between the two countries.
Since returning to power, Trump has repeatedly argued that Canada should be incorporated as the “51st state.” He has said Canada would receive greater economic and security benefits as part of the US than it does now.
In Canada, the remarks have been seen as an affront to the country’s sovereignty and have drawn a fierce backlash. Boycotts of US-made products have spread, and a petition calling for the expulsion of the US ambassador to Canada has gathered 170,000 signatures.
Kim Hee-sun, Hankyung.com reporter [email protected]
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