Canada is imposing import tariffs on about 17 billion euros worth of products from the US. This is the response to higher import tariffs that President Trump introduced last weekend in the trade war with the country.
Canada's tariffs of 15, 25 or 50 percent will apply to about 500 products, such as aluminium, furniture, cheese, electronics and white goods. The new rate will take effect on September 8, exactly two weeks from now. The amount is aligned with the part of the Canadian economy that the US has additionally taxed.
At the same time as the sanctions, the Canadian cabinet announced a package of measures to help Canadian entrepreneurs affected by the American trade restrictions. 4.5 million euros will be allocated to absorb the impact.
At the eleventh hour failed
Canada and the US seemed almost to have reached an agreement in their trade talks last week. President Trump even prematurely announced that a deal was ready to be signed. At the last moment, however, the talks broke down.
Negotiators on both sides blame the other party for the collapse of the negotiations. Without going into detail, American trade envoy Greer said that the Canadians "backtracked" and put new demands on the table.
The Canadian Prime Minister Carney, who was questioned much more extensively about the failed talks, said that the Americans ultimately obstructed too much. "We thought we were working on a deal that would benefit both of us, but the US came with new demands that were economically irresponsible and unfair and would have undermined the benefits for Canada."
Pick-up truck and French labels
For example, the US allegedly refused at the last moment to lower the import tariff on pick-up trucks, an important part of the Canadian auto industry. "We could not accept what the US offered and not give what they asked," Carney summarized the outcome.
Another sensitive point, according to the Canadians, was the language requirements for, for example, food labels in Quebec. The US wanted an exception to the rule that these must also be in French. "The Americans find the French language and culture of Quebec annoying, but here in Canada, in Quebec, it is a fundamental right," Carney explained in French.
After the breakdown of the negotiations, Trump announced higher import tariffs on a multitude of Canadian import products, from flowers, honey and alcohol to electronics and smartphones. In total, this also concerned about 17 billion euros. Last year, the countries traded with each other for more than 750 billion euros in total.
Lake America
Trump immediately warned that Canada should "behave," because there could be "much worse consequences" for the country. So far, the important and closely intertwined auto industry of both countries has not been affected by the new round of sanctions back and forth.
The trade war comes at a politically sensitive time for Trump, with the congressional elections at the end of this year. Among Republicans, there is fear that voters in border states will punish their party for Trump's tough trade policy. For example, party colleague Susan Collins, who hopes to be re-elected in the border state of Maine, called the trade war outright "a mistake."
Trump has not yet responded to the new round of Canadian sanctions. Earlier today, however, he proposed renaming Lake Ontario, named after the densely populated province of the neighboring country, to Lake America, just as he previously imposed the name Gulf of America on the Gulf of Mexico. "We are seriously considering that, because we do not expect to do much business with Ontario anymore."