The latest attempt by the United States and Canada to settle their trade dispute has failed, with President Donald Trump's administration set to impose 50% tariffs on about $20 billion worth of Canadian products.
The duties were expected to take effect early Saturday local time after last-minute negotiations between the two countries failed to produce an agreement. The affected goods account for about 5% of Canada's annual exports to the US and include products such as hockey sticks and tongue depressors.
Washington and Ottawa blame each other
US Trade Representative Jamieson Greer said Canada had rejected terms that Washington believed would have given it favourable treatment.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. 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 said, according to the Associated Press.
Canadian Prime Minister Mark Carney rejected the US position, saying the proposed terms had changed at the last minute.
“Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal."
Carney said Canada would announce additional support for workers and businesses and asserted that Ottawa would match the new US tariffs dollar for dollar.
Greer described the US proposal as “forward-looking" and said it offered “a historic economic and national security partnership".
Trade tensions threaten close ties
The latest tariff dispute comes despite the scale of economic ties between the two countries. The US and Canada exchanged about $880 billion in goods and services last year.
The tariff deadline had initially been set for Wednesday, but Trump extended it by three days to allow negotiations to continue.
The two countries have long had disagreements over issues such as Canadian softwood lumber exports and US access to Canada's protected dairy market. However, they have also maintained close military and economic ties.
Their 5,525-mile border remains undefended, while nearly 330,000 people and goods worth about $2 billion cross it each day.
Anger grows in Canada
Trump has repeatedly suggested that Canada should become America's 51st state, adding to tensions in the traditionally close relationship.
Public opposition has also grown. A petition seeking the removal of US Ambassador Pete Hoekstra had collected nearly 248,000 signatures since July 21.
Canada is heavily dependent on the US market, with nearly 72% of its goods exports going south of the border last year.
The tariffs could also create political pressure in the US if importers pass higher costs on to consumers, adding to cost-of-living concerns ahead of November's midterm elections.