U.S. mulling further trade sanctions after Canada’s retaliation: White House official

The Trump administration is discussing additional trade penalties against Canada after Prime Minister Mark Carney unveiled dollar-for-dollar retaliation to new tariffs imposed by the U.S. on Saturday.

Additional U.S. escalation against its northern neighbor could include higher tariffs and other trade actions, according to a White House official, who spoke on the condition of anonymity to discuss internal deliberations. The official said that an administration response to the latest Canadian moves was expected.

The threat underscores the prospect of a spiraling trade war between the two nations.

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The official pointed out that President Donald Trump possesses an array of tools that can be deployed in the dispute that intensified after talks between the US and Canada broke down late last week.

Trump has already promised to double auto tariffs on Canada to 50 per cent and impose tariffs on auto parts, starting Jan. 1, as a result of Canada striking back.

Trump and Carney were close to a possible deal, but talks broke down late Friday, and 50 per cent tariffs on about $20 billion in Canadian goods came into effect just after midnight, under the never-before-used provision of the 1930 Tariff Act Section 338.

Since Saturday, the already-tense relationship has plunged into outright acrimony, with each side blaming the other for intransigence, unfair treatment and last-minute changes.

In Ottawa on Tuesday, the Canadian government announced that it would double its existing counter-tariffs on U.S. steel and aluminum products to 50 per cent. American-made milk, furniture, clothing and apparel will also have new 50 per cent duties applied, as will video-game consoles, smartphones and other electronics.

Overall, those retaliatory levies will affect US$20 billion worth of annual U.S. exports to Canada, roughly matching the dollar value of Canadian goods the White House imposed tariffs on Saturday. That is equal to about six per cent of U.S. exports to Canada last year.