US-Canada trade dispute escalates amid new tariffs

The latest escalation in the trade rift between Canada and the United States underscores growing strains in US relations with its traditional allies under the "America First" policy, experts said, as Ottawa vowed retaliatory tariffs on US goods after Washington announced 50-percent tariffs on imports from Canada.

Experts said the development casts fresh doubts on the future of the US-Mexico-Canada Agreement, the cornerstone of North American trade, as US protectionist measures and trade disputes increasingly challenge the region's deeply integrated economic ties.

Canadian Prime Minister Mark Carney announced retaliatory tariffs on US goods on Saturday after walking away from what he called a "bad deal", as trade tensions between the longtime allies deepened following the collapse of last-ditch negotiations.

Negotiations between the neighboring countries broke down on Friday in Washington, DC, putting into force new 50-percent US tariffs affecting about $20 billion worth of goods, or 5.5 percent of Canada's exports to the US.

New Canadian tariffs, which are set to take effect on Sept 8, will notably target the US steel and dairy industries. More details will be revealed next week, Carney said.

"You're at war when you get attacked. We got attacked," he added.

US President Donald Trump hit back at Canada on Sunday, saying, "Canada wants the benefits of being a State, without being one!!!""They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!" he wrote in a post on Truth Social.

Trump had previously said Washington "should be able to have a deal with Canada", citing his "good relationship" with Carney.

But on Saturday, the Canadian prime minister said that Trump set conditions that were ultimately unacceptable even though earlier talks had been positive.

US Trade Representative Jamieson Greer told The New York Times on Saturday that the US had offered to reduce its tariffs on steel, aluminum and autos, as well as eliminate a recently imposed tariff on Canadian lumber.

Greer told Fox News on Saturday that Washington was "moving forward with measures that respond to Canadian retaliation". He said that no new talks were planned with Canadian negotiators.

"We've been under no illusions. We recognized from the start that America has changed," Carney said on Saturday. "We recognize that sometimes, its signature was written in pencil."

Chen Hong, director of East China Normal University's Asia Pacific Studies Center, told China Daily that the tariff war initiated by the US has not only taken a toll on the Canadian economy but also severely strained a decades-old alliance, exposing the growing fragility of Washington's ties with its traditional allies.

Although the latest tariffs cover only about 5 percent of Canada's exports to the US and affect a relatively limited number of industries, Ottawa's decision to respond firmly reflects its determination to safeguard its autonomy in industrial and trade policy, he said.

According to a recent survey by Abacus Data, a Canadian polling firm, 36 percent of respondents want Canada to respond with new counter-tariffs, "even if that raises prices and risks escalation".

"Over the past several decades, the US and Canada have forged a close political alliance and deeply integrated their economies under relatively stable and preferential trade arrangements. But the current US administration's 'America First' strategy has turned Canada's heavy dependence on the US market into an increasingly significant economic and strategic vulnerability," Chen said.

The current breakdown also complicates the future of the US-Mexico-Canada Agreement, he added.

Experts also said that Canada would find it difficult to break free from its deep economic dependence on the US in the near term.

"Realistically, Canada would find it difficult to offset the losses from reduced access to the US market in the short term," said Huang Zhong, an associate researcher at Guangdong University of Foreign Studies' Center for Canadian Studies.

"While Canada has 15 free trade agreements covering 51 countries and providing access to markets representing 61 percent of global GDP, this extensive network is still far from sufficient to replace the US market," he said.

Agencies contributed to this story.

liujianqiao@chinadaily.com.cn