Trump’s chaotic trade policy continues to face legal challenges
Trump’s promised tariffs of 50% on some Canadian goods would risk higher inflation on both sides of the border.
President Donald Trump’s promised 50% tariffs on some Canadian goods went into effect just after midnight on Saturday, Aug. 22 after the United States and its northern neighbor failed to reach an agreement on trade.
The tariffs were announced in a July 20 executive order and were initially scheduled to go into effect on Aug. 19, but Trump put a three-day pause on the tariffs, saying the two countries were making a deal.
Both sides of the negotiating table blamed each other for crumbling trade negotiations late on Aug. 21.
Canadian Prime Minister Mark Carney said in a statement posted to social media late the night of Aug. 21 that he was suspending trade negotiations with the United States and ordering Canadian negotiators to return to Ottawa.
“They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” Carney said. “However, last-minute changes in the U.S. proposed terms were very unfair, uneconomic, and called into question the reliability of any deal.”
Carney said Canada would match the tariffs “dollar for dollar.”
Meanwhile, the office of U.S. Trade Representative Jamieson Greer said in a statement that Canada declined to finalize the deal.
“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days,” Greer’s office said. “In addition, Canada is continuing to maintain its prolonged retaliation against the United States, including, among other things, flat-out prohibitions on certain American goods and services.”
The tariffs apply to just over 5% of Canadian exports to the United States, including on various goods such as wine, dairy, hockey sticks and cement. Carney said about $28 billion worth of goods would be tariffed. They do not apply to exempted goods including energy, potash, fish and critical minerals. The tariffs do not qualify for preferential treatment under the U.S.-Mexico-Canada free-trade agreement, which shielded much of Canadian goods from earlier U.S. tariffs.
Trump in announcing the tariffs last month said he aimed to counteract the “burden and disadvantage on U.S. commerce from Canada’s discriminatory treatment of U.S. commerce.” He had also previously threatened tariffs on Canada over wildfire smoke pouring south into the United States.
Trump administration officials previously told reporters on the condition of anonymity that Canadian trade practices on alcohol, automobiles and dairy products exported from the United States prompted the action.
Most Canadian provinces have halted the purchase of alcohol from the United States in the past year. Canada has also imposed tariffs on automobiles from the United States, but not other countries, along with more restrictive tariff-rate quotas on cheese from the United States, the officials said.
The deal being worked on between U.S. and Canadian trade representatives was to include “comprehensive market access for all American goods, economic security commitments, digital trade alignment,” Greer’s office previously said.
In an interview on Fox News Aug. 22, Greer said the United States doesn’t have additional talks with Canada planned.
Contributing: Joey Garrison, USA TODAY; Reuters