At last, the United States is about to retaliate against Canada with a 50% tariffs on approximately USD 20 billion worth of Canadian imports, after a long night of negotiations between the two nations, which ultimately didn’t result in a mutually agreeable outcome.
The new import tariffs are expected to impact around 5 percent of Canada’s annual exports to the U.S., and hockey sticks and other medical equipment like tongue depressors may be among the goods in between.
Jamieson Greer, US trade representative, has stated that Canada has rejected a trade agreement that was reportedly agreed upon earlier this week on those terms. He challenged Ottawa for bringing new issues into the equation and changing its own obligations, thus upsetting an equilibrium already achieved during the talks.
The US has been a “special friend” to Canada, compared with other big exporters, Greer said, and the proposal can be worthy of a “historic economic and national security partnership.”
But Canadian Prime Minister Mark Carney disagreed with the assessment of Washington on the negotiations. Last-minute adjustments to the proposed conditions at which the United States was willing to grant aid were unfair and uneconomic, to say the least, and were cause for questioning the reliability of any future agreement, he said.
As for more worker and business support measures, the Canadian government plans to introduce them in the next few days, Carney said.
Adding more to the tension with the two natural allies, the latest tariff threat has been added to today. Although the immediate economic effect might be modest in view of the fact that the affected products make up a relatively minor share of Canada’s exports to the US the political ramifications may be significant.
The economies of the two States are highly integrated, and bilateral trade and services last year amounted to some $880B in value.
The next few rounds of talks are, therefore, feared to lead to further tensions in trade and potential economic sanctions between the border states.