US-Canada Trade War Deepens as Tariff Talks Collapse

WASHINGTON: Trade tensions between the United States and Canada have escalated sharply after last-ditch negotiations between the two countries failed to produce an agreement, prompting Washington to impose new tariffs on Canadian imports and Ottawa to prepare retaliatory measures.

The United States has imposed 50% tariffs on about $20 billion worth of Canadian goods, affecting products including electronics, industrial machinery and dairy items. The latest measures add to existing U.S. tariffs on several Canadian sectors, including steel, lumber and automobiles.

Canadian Prime Minister Mark Carney said Ottawa would respond on a “dollar-for-dollar” basis, with Canadian retaliatory measures expected to take effect on September 8. The measures are expected to target selected U.S. products and sectors affected by the new American duties.

The collapse of the negotiations follows several weeks of intensive discussions aimed at easing the trade dispute between the two longstanding allies. The two sides have exchanged accusations over responsibility for the breakdown, with Canadian officials criticizing what they described as last-minute U.S. demands and Washington blaming Canada for failing to accept the terms necessary for an agreement.

The latest escalation has raised concerns over the broader future of economic relations between the United States and Canada and could further complicate the implementation and review of the United States-Mexico-Canada Agreement (USMCA). Businesses and industry groups on both sides of the border are facing increased uncertainty over costs, supply chains and market access.

The renewed tariff confrontation marks another significant deterioration in economic ties between the two neighboring countries, whose economies remain closely integrated through extensive cross-border trade and investment.