Canadas retaliatory tariffs take effect as US trade talks stall

Canada’s retaliatory tariffs on US goods took effect ​just after midnight on Tuesday as Prime Minister Mark Carney increased economic pressure on his country’s ‌biggest trading partner after negotiations collapsed last month, intensifying an 18-month-old trade war.The counter-tariffs cover $20 billion of US goods, with duties ranging from 15% to 50% across products from steel and furniture to clothing and electronics.The dollar-for-dollar retaliation marks an escalation in the dispute between the neighboring ​countries, and US and Canadian officials have traded blame for scuttling a deal that seemed close to ​fruition two weeks ago.The rising tensions create uncertainty about the broader US-Mexico-Canada free trade ⁠agreement, which is up for annual reviews after US President Donald Trump declined to extend it for another decade.“What we ​are worried about is an escalatory spiral,” said Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and ​a member of Carney’s advisory committee on bilateral US economic relations.“But at the same time, we totally understand that the prime minister needs to find areas of leverage,” Harvey said.Trump’s tariffs implemented last month hit sectors including wine, furniture, ​dairy products, cement, clothing, fishing rods and hockey equipment, covering $20 billion, or 5%, of Canadian exports to the US.According ​to Canadian and US government data, Canada has shipped almost 68% of total exports to the US this year, out of which ‌roughly 80% ⁠moved duty-free due to exemptions under the USMCA pact.

Protections under the agreement have provided the domestic economy some resilience.The new tariffs, imposed under a Depression-era US law, do not allow Ottawa to exercise USMCA exemptions.Concerns about the USMCA’s future have fuelled uncertainty about investment and growth, as Canada wages a trade war against an economy 13 times its ​size.Polls show Carney has broad s...