The breakdown in negotiations between the US and Canada has plunged the two countries into a trade war. In his first public comments, US President Donald Trump lashed out at Canada. On social media, he wrote: "Canada wants the benefits of being a State, without being one!!!" He also accused Canada of charging American farmers high tariffs for years, adding "No more!!!"
These comments came after the US imposed 50% tariffs on $20 billion (£14.6 billion) worth of Canadian goods. Canadian Prime Minister Mark Carney has vowed to respond "dollar for dollar." The US tariffs took effect on Saturday and cover a range of goods from hockey sticks to tongue depressors. Experts predict the tariffs could lead to some job losses, but the biggest impact is expected to be political, creating fresh tension between the neighbors.
Both sides blamed each other for the failed talks in Washington on Friday. Carney told Canadian journalists that the country is "at war" over trade with the US, after Trump "miscalculated" by escalating his tariff attack. "You're at war when you're attacked, and we got attacked," he said to reporters in Ottawa. "We cannot accept what they've offered and we will not give what they've asked."
US Trade Representative Jamieson Greer said the US was compelled to act after a year of retaliatory measures by Canada. He told Fox & Friends Weekend: "We've said enough and so we've taken countermeasures. Our interest is in protecting American workers and protecting American supply chains."
Carney, who previously served as the Governor of the Bank of England, was elected as Canada's prime minister last year after campaigning to lead a fightback against Trump, who has previously suggested he wants to make Canada a 51st state with "economic force." Carney's "dollar for dollar" tariffs are expected to take effect from September 8, with new levies on steel, dairy, appliances, and electronics. This escalation has also called into question the future of the North American trade pact between the US, Canada, and Mexico, known as USMCA.
The pact, signed by Trump during his first term, governs about $2 trillion annually in goods and services between the three countries. Trump refused to renew USMCA this summer after Canada and Mexico formally requested a 16-year extension. When asked how the collapse in US-Canada trade talks would affect USMCA, Carney said it was "certainly not good news."