Trump's 50% tariffs on Canadian goods take effect amid trade war escalation
Xinhua · 4 SOURCES44 minutes ago3 MIN
Summary
U.S. President Donald Trump's 50 percent tariffs on approximately $20 billion worth of Canadian imports took effect Saturday after trade negotiations between the two countries collapsed at the eleventh hour. Canada, which sends 72 percent of its goods exports to the United States, has vowed retaliatory measures with Prime Minister Mark Carney promising dollar-for-dollar countermeasures starting September 8 . The new levies are expected to affect about 5 percent of Canada's annual exports to the United States, covering goods ranging from hockey sticks to agricultural products . The escalation marks a dramatic collapse of what was once one of the world's most durable trade alliances and no further talks are currently scheduled .
Key Points
- The 50 percent tariffs affect approximately $20 billion in Canadian goods, representing roughly 5 percent of Canada's annual exports to the United States .
- Prime Minister Mark Carney has promised "dollar for dollar" retaliatory measures against the United States, with those countermeasures set to begin on September 8 .
- Products subject to the new tariffs include hockey sticks, wine, cement, honey, seeds, agricultural products, makeup, perfumes, clothing, jewelry, furniture, cameras and fabric .
- The 50 percent levy applies to some products that were previously protected under the US-Mexico-Canada Agreement (USMCA), raising questions about the future of that trade pact .
- Trump announced Monday that tariffs on Canadian cars, trucks, auto parts and steel would increase to 50 percent starting January 1, 2027, targeting Ontario particularly, where Premier Doug Ford has taken a pugnacious approach to negotiations .
- Auto industry executives have expressed skepticism about the threat, noting that Trump previously announced large tariffs that never materialized and that such tariffs would likely spark massive Canadian retaliation .
- On Truth Social, Trump stated "Build in the U.S. and there are ZERO TARIFFS" and claimed "WE DON'T NEED CANADA, THEY NEED US" .
Why It Matters
The collapse of trade negotiations and implementation of 50 percent tariffs plunge the two countries deeper into a trade war that has kept both sides of the border on edge throughout Trump's second term in office . Experts warn that steeper tariffs raise costs for businesses and almost always trickle down to households in the form of higher prices. "Nearly all industries and professions are likely to see downstream effects from this spiraling trade dispute," said Augustine Lo, a trade attorney at Dorsey & Whitney .
The collapse of trade negotiations and implementation of 50 percent tariffs plunge the two countries deeper into a trade war that has kept both sides of the border on edge throughout Trump's second term in office . Experts warn that steeper tariffs raise costs for businesses and almost always trickle down to households in the form of higher prices. "Nearly all industries and professions are likely to see downstream effects from this spiraling trade dispute," said Augustine Lo, a trade attorney at Dorsey & Whitney .