Canada is readying a response to U.S. President Donald Trump’s wide-ranging 50 per cent tariffs on the Canadian economy that went into effect this weekend after trade talks collapsed.
Prime Minister Mark Carney is expected to face questions on the matter when he holds a trade-related press conference at noon Eastern, alongside Quebec Premier Christine Frechette.
After weeks of intense negotiations, with Trump claiming both sides were close to finalizing a “very fair deal,” talks broke down late Friday evening.
New 50 per cent tariffs on $28 billion-worth of Canadian exports went into effect early Saturday morning.
Canada was “walking away from a bad deal,” Carney said in a statement, vowing “dollar-for-dollar” tariffs in response to Trump’s levies, adding that he had asked Canada’s negotiators to return to Ottawa and was suspending trade talks.
“We cannot accept what they’ve offered, and we will not give what they asked,” Carney said in Ottawa on Saturday morning.
The details of Canada’s counter-tariffs will be released “early next week,” Carney said at the time.
The Canadian countermeasures will go into effect after the Labour Day long weekend, on Tuesday, Sept. 8, he added.
“Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Also include products that are currently subject to unjustified section 232 and 338 tariffs,” he said.
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Washington “asked too much and offered too little” as negotiations dragged on this week, Carney said.
Carney outlined several outstanding issues that contributed to talks breaking down, including which types of vehicles would be excluded from the ambit of a free trade deal and how much Canadian content in autos could be included.
Carney also pointed to last-minute addition of language that would restrict Canada’s ability to make free trade deals with other counties, as well as an effort to restrict “protections of our language, culture and in effect our sovereignty.”
Trump took to his preferred social media platform Truth Social, claiming that Canada “wants the benefits of being a State, without being one,” adding that Canada has “charged our great farmers, for many years, massive amounts of Tariffs.”
On Saturday, Carney convened a meeting of Canada’s premiers to discuss “next steps to protect Canadian interests, including dollar for dollar counter-tariffs.”
Trump’s trade war will be “a body blow to North American competitiveness,” the Canadian Chamber of Commerce said.
“A whopping, non-absorbable tariff is not sustainable or viable for business,” said Candace Laing, president and CEO of the Canadian Chamber of Commerce.
While Trump’s new tariffs are “a re-intensification of U.S. tariff threats,” the size of these tariffs is “likely not large enough to derail Canada’s economic growth,” a Royal Bank of Canada report on Saturday said.
This is because most (more than 80 per cent) of Canadian exports to the U.S. would remain tariff-free under the new tariffs, the report said but added that the “unpredictability” of the U.S. administration’s trade policy will make it hard for businesses to plan ahead.
Following the new tariffs, Canada’s effective tariff rate will rise from three per cent to six per cent. While this is still below the average U.S. tariff rate on imports from all countries (around seven per cent), it would no longer be the lowest among major U.S. trade partners, the report said.
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