American tariffs on Canadian goods take effect after trade talks fall apart

The Trump administration's latest round of tariffs against billions of dollars worth of Canadian goods took effect just after midnight Saturday, after the two countries failed to seal a last-minute trade deal that satisfied both sides.

U.S. Trade Representative Jamieson Greer issued a statement confirming the tentative deal had fallen apart.

"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 told reporters just after 11:30 p.m. ET.

"In addition, Canada is continuing to maintain its prolonged retaliation against the United States, including, among other things, flat out prohibitions on certain American goods and services."

The fresh slate of tariffs kicked in at 12:01 a.m. ET, according to a senior administration official.

Prime Minister Mark Carney confirmed negotiations had fallen apart. He said Canada "will match the new tariffs dollar for dollar to protect our workers and businesses."

"I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa. They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute. However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal," read a statement from the prime minister.

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The fresh American tariffs and the promise of Canadian counter-tariffs are a significant escalation in the trade dispute between Canada and the U.S., two countries once seen as being as close as can be on trade. Canada's trade minister met with Greer, his American counterpart, in Washington, D.C., throughout the week to try to find an agreement before Friday's deadline.

Under the Trump administration's new policy, levies of 50 per cent will apply to hundreds of products worth more than $28 billion — from plywood and cement to wine and hockey sticks.

The Trump administration has said the tariff threat was a response to Canada's retaliation against U.S. trade policy and its discrimination against the American dairy, alcohol and automotive sectors. Last month, Prime Minister Mark Carney said most of those measures — like taking American liquor off the shelves in several provinces — were "merely" Canada's response to the argument the White House started by announcing other levies last year.

The new duties are imposed through Section 338 of the U.S. Tariff Act, or the Smoot-Hawley Act, which was created during the Great Depression nearly a century ago.