The United States has imposed 50% tariffs on certain Canadian goods after the two longstanding allies failed to reach a new trade agreement, with both sides accusing each other of causing negotiations to break down.
The tariffs took effect shortly after midnight on Saturday, targeting about US$20 billion (RM84 billion) worth of Canadian products, including items such as wooden hockey sticks. The affected goods account for just over 5% of Canada’s exports to the US, limiting the immediate economic impact.
However, the latest move has heightened tensions between US President Donald Trump and Canadian Prime Minister Mark Carney, while potentially making broader negotiations to renew the US-Mexico-Canada trade agreement more challenging.
Carney announced that Canada was suspending trade negotiations and would respond to the new tariffs with matching measures. He said Canadian negotiators had worked in good faith but described last-minute changes to the US proposal as unfair and economically damaging.
The breakdown came after three days of talks in Washington between Canada’s minister responsible for trade with the US, Dominic LeBlanc, and US Trade Representative Jamieson Greer. Earlier, both sides had appeared close to a potential agreement that could have reduced tariffs on Canadian steel, aluminium and automobiles, while possibly allowing American alcohol products to return to Canadian liquor stores.
Greer, however, said Canada had ultimately declined to finalise the agreement under the terms discussed earlier in the week, calling the outcome a missed opportunity for closer economic cooperation between the two countries.
A senior Trump administration official said the US proposal would have given Canada the most favourable tariff position among major exporters to the US. However, Ottawa was reportedly seeking further concessions covering key sectors such as steel, aluminium, automobiles and softwood lumber.
The latest tariffs add to existing US duties on Canadian steel, lumber and vehicles, industries that have already faced significant pressure over the past 18 months. Trade experts have warned that the additional measures could further threaten vulnerable Canadian industries, potentially resulting in job losses and business closures.
No further negotiations have been scheduled as the new tariffs take effect, leaving the trade relationship between the two major North American economies facing renewed uncertainty.
