U.S IMPOSES 50% TARIFFS ON $20 BILLION IN CANADIAN GOODS AS CANADA VOWS DOLLAR-FOR-DOLLAR RETALIATION. (PHOTO).

U.S imposes 50% tariffs on $20 billion in Canadian goods as Canada vows dollar-for-dollar retaliation

 The United States imposed 50% tariffs on about $20 billion worth of Canadian goods early Saturday after last-minute negotiations between the two countries failed to produce an agreement. Canada quickly announced plans to respond with matching tariffs, escalating tensions between the longtime allies and raising new questions about the future of their North American trade relationship.

President Donald Trump’s tariffs affect roughly 5% of Canada’s annual exports to the United States and cover a range of products, including hockey equipment and medical supplies. Canadian Prime Minister Mark Carney said his government would match the tariffs dollar for dollar to protect Canadian workers and businesses.

The two countries had been negotiating over tariffs affecting major Canadian industries, including steel, aluminum, automobiles and lumber. U.S. Trade Representative Jamieson Greer said Canada backed away from terms that had been under discussion and introduced new demands, preventing the two sides from completing an agreement.

Carney blamed the breakdown on last-minute changes proposed by the Trump administration, calling the terms unfair and economically damaging. He suspended negotiations and sent Canada’s negotiating team back to Ottawa, while promising additional assistance for workers and businesses affected by the tariffs.

The impasse came only two days after officials from both countries had indicated that a compromise appeared close. Carney said Canada had consistently sought the best possible agreement but would not accept a deal simply to meet a deadline.

Ontario Premier Doug Ford backed the government’s response, saying Canada should retaliate tariff for tariff and dollar for dollar while keeping all options available.

The dispute threatens to deepen a trade conflict between countries that exchanged roughly $880 billion in goods and services last year. The tariffs had initially been scheduled to take effect Wednesday, but Trump delayed them for three days to give negotiators additional time.

Although the United States and Canada have long disagreed over issues such as lumber and dairy access, the countries have traditionally maintained close economic and political ties. Their 5,525-mile border is largely undefended, and hundreds of thousands of people and billions of dollars in goods cross it regularly.

Trump’s trade policies have significantly strained that relationship. His administration has used tariffs to encourage manufacturing in the United States, while Trump has also repeatedly suggested that Canada could become the 51st U.S. state.

Carney said Canada has recognized that the relationship with the United States has changed and will not simply return to the way it was before Trump’s return to office.

The escalating dispute is also creating frustration among Canadians, while businesses on both sides face uncertainty over rising costs. Canada sends nearly 72% of its goods exports to the United States, making the American market particularly important to the Canadian economy.

The tariffs could also affect American consumers because U.S. importers typically pay the duties and may pass higher costs along through increased prices. The timing could be particularly challenging for the Trump administration as voters continue to focus on the cost of living ahead of the November midterm elections.

Canadian business leaders warned that the tariffs could weaken North American competitiveness, increase costs and put pressure on Canadian consumers, companies and investment.

Trump has increasingly relied on tariffs as a central part of his economic agenda. After the Supreme Court ruled in February that he had exceeded his authority with an earlier set of broad tariffs, his administration turned to other legal mechanisms to impose import taxes.

For the new Canadian tariffs, Trump invoked Section 338 of the Tariff Act of 1930, a rarely used provision that allows the president to impose tariffs of up to 50% on imports from countries accused of discriminating against U.S. businesses.

The provision dates to the Great Depression era and was enacted alongside the broader tariff policies associated with the Smoot-Hawley Tariff Act, which economists and historians have long criticized for restricting international trade during an economic crisis.

The dispute comes as the United States, Canada and Mexico face negotiations over the future of the U.S.-Mexico-Canada Agreement, the trade pact Trump negotiated during his first term. The United States has already begun discussions with Mexico about changes to the agreement, but formal talks with Canada have yet to begin.

With both governments now publicly committed to retaliatory tariffs, the latest escalation could make it significantly more difficult for the countries to find a compromise.