According to reports from the British 'Financial Times' and CNN, Canadian Prime Minister Marc Garneau announced on August 23 local time that Ottawa had suspended trade negotiations with the United States and would implement a ‘dollar-for-dollar’ countermeasure in response to the new U.S. tariffs. He accused U.S. President Donald Trump of misjudging Canada's determination, stating that the two countries were in fact entering a trade war.
When you are attacked, you are in the midst of a war, and we have already been subjected to attacks." Kane said on Thursday in Ottawa to reporters. He stated that Trump underestimated Canada's ability to withstand economic difficulties, which ultimately led to trade war escalation further.
Canadian Prime Minister Justin Trudeau (leftmost) Canadian News Agency
Khan revealed that both parties had made progress towards a potential agreement this week. However, the United States suddenly changed its stance before the midnight deadline and proposed new modifications, which are “completely unacceptable” to Canada.
He said that the new conditions proposed by the US in the last few days are ‘untenable economically, unfair, and weaken the overall value of the agreement.’ ‘Ultimately, they want too much and give too little,’ said Cohn.
According to Canning, Canada has not proposed any new additional requirements. Instead, it has always tried to respond to the ever-changing concerns of the US side, including combating the cross-border trafficking of fentanyl and adjusting certain anti-tariff measures that have caused dissatisfaction among Trump. The goal is to reach a comprehensive agreement that serves the common interests of both countries.
He also accused the United States of trying to restrict Canada’s ability to sign trade agreements with other countries at the last moment. He raised new accusations of trade barriers on the grounds of Quebec French language protection policies, which became an important reason for the failure of the negotiations.
With the negotiations failing, the United States will impose a 50% tariff on Canadian exports worth approximately $20 billion. This is an additional escalation compared to the existing tariffs on steel, aluminum, wood, and automobiles. In response, Justin Trudeau announced that Canada will take “dollar-for-dollar” equivalent retaliations, which will cover various sectors such as steel, dairy products, household appliances, agricultural equipment, pulp, paper, and electronics. These measures are scheduled to take effect on September 8.
Khan also stated that if the United States were to "significantly reduce" the tariffs on Canadian steel and aluminum and other strategic industries, Canada would be willing to lift the corresponding retaliatory tariffs, and would encourage each province to resume the sale of American alcoholic products.
Canada has consistently demanded that the United States remove tariffs on 50% of steel and aluminum products, 25% on automobiles, as well as tariffs and anti-dumping duties on Canadian timber. The Canadian government stated that these measures have led to the closure of many timber factories over the past 18 months, resulting in the loss of a large number of jobs.
As of now, Trump has not responded to the breakdown of the negotiations. On the afternoon of the 22nd, he even stated, “We should be able to reach an agreement with Canada.”
U.S. Trade Representative Jamie Wilson said on the 22nd that it is “hard to say” whether the negotiations between the two parties can get back on track.
"We have no plans for new talks on trade with Canada." Griel said in an interview with Fox News when asked, "We will continue to act in response to Canada's retaliatory measures."
He also said that the breakdown of negotiations was “a missed opportunity for Canada,” and insisted that the plan proposed by the US was “the most favorable treatment that the US can offer to any major exporting country.” He stated that the White House would provide Trump with further policy options for dealing with Canada’s countermeasures, in order to “restabilize the competitive environment.”
The escalation of the trade war has also caused concerns among Canada's business community. Dan Kelly, president of the Canadian Independent Business Association, said that about 40% of Canada's small export businesses will be directly affected by the new tariffs, and nearly one-third of these businesses expect their revenues to drop by more than 50%.
The Financial Times points out that as the U.S. midterm elections approach, the Trump administration is facing domestic economic pressures. The costs of the war in Iran, record federal debt, rising fuel prices, and high mortgage rates are becoming issues that American voters are paying more attention to.
