The U.S. imposed 50% tariffs on a range of Canadian products Saturday after negotiations between the two countries failed to produce a trade agreement before a final deadline.
The new duties took effect at 12:01 a.m. Eastern Time and cover approximately $20 billion worth of U.S. imports from Canada, or roughly $28 billion in Canadian dollars.
The tariffs stem from three proclamations signed by President Donald Trump on July 20 under Section 338 of the Tariff Act of 1930, which allows the president to impose duties of up to 50 percent in response to discriminatory treatment of US commerce by another country.
The Trump administration cited several Canadian trade practices in announcing the measures, including restrictions involving dairy products, automobiles and alcoholic beverages.
Trump said the tariffs were intended to counter the “burden and disadvantage on U.S. commerce from Canada’s discriminatory treatment of U.S. commerce.”
The duties were initially scheduled to take effect Aug. 19. Trump, however, granted Canada a three-day reprieve shortly before that deadline as negotiators attempted to finalize an agreement.
Officials from both countries subsequently engaged in intensive negotiations in Washington, DC.
The discussions reportedly included potentially reducing existing US tariffs on Canadian steel and aluminum from 50 percent to 25 percent. Tariffs on Canadian automobiles could also have been reduced from 25 percent to 15 percent under the proposed arrangement.
Canada, in exchange, was expected to make commitments related to market access and other trade issues.
Despite the negotiations, the two countries failed to reach a final agreement.
US Trade Representative Jamieson Greer announced Friday night that Canada had declined to finalize the proposed deal.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week, despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market,” Greer said.
Greer accused Canada of making new demands and reversing previous commitments, which he said “upended the careful balance reached in the past days.”
The trade representative also accused Canada of continuing retaliatory measures against the US, including prohibitions on some American products and services.
According to Greer’s office, the proposed agreement would have provided expanded market access for American products while including commitments concerning economic security and digital trade.
No additional negotiations were immediately scheduled following the breakdown.
The 50 percent duties cover numerous Canadian products, including wine and other alcoholic beverages, dairy products, cement, clothing, furniture, plywood, certain plastics, electrical equipment, fishing rods, hockey sticks and other industrial and consumer goods, per Trending Politics.
The affected imports represent slightly more than five percent of Canada’s annual goods exports to the US based on recent trade figures.
Several major Canadian exports are excluded from the new tariffs, including energy products, potash, fish and critical minerals.
For the products covered by the latest action, the tariffs apply regardless of preferential treatment that would otherwise be available under the United States-Mexico-Canada Agreement.
Existing US tariffs targeting Canadian steel, aluminum, automobiles and softwood lumber also remain in effect.
The latest measures mark another escalation in trade tensions between Washington and Ottawa after several days of negotiations appeared to bring the two longtime trading partners close to an agreement.
