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Trade deal talks between America and Canada that lasted for 3 days failed. After this, US President Donald Trump imposed 50% tariff on Canadian goods worth $ 20 billion (about Rs 1.9 lakh crore) from Saturday midnight.
This tariff represents about 5% of total goods shipped to the US from Canada. US and Canadian officials held three-day talks in Washington DC, but a trade agreement could not be finalized.
Canadian Prime Minister Mark Carney said that the more tariffs America imposes, the more Canada will respond.
Why did America impose such high tariffs on Canada?
The US says that some of Canada’s trade policies are harmful to American companies. There is a long standing dispute between the two countries on many issues. Among these, automobile, dairy products, liquor and wood business are prominent.
America had earlier announced the imposition of new tariffs from August 20. However, just before the deadline, both countries decided to start talks. After this, Trump extended the deadline for implementing the tariffs by 3 days, so that an agreement could be tried.
According to American officials, agreement was reached on many issues, but in some important matters the two countries could not agree on each other’s terms.
1. Allegation of discrimination against American cars
- The US has long complained that Canada’s trade policy does not give American car companies a level playing field in the Canadian market.
- America wants the Canadian market to be more open for its cars and other goods.
- Canada, in return, had asked the US for relief from tariffs imposed on steel, aluminium, cars and lumber. But America was not ready to remove these tariffs.
2. Canada’s protection of its dairy market
- Canada has long been implementing several regulations to protect its dairy market from foreign companies and cheap dairy products.
- America wants an opportunity to sell its milk, cheese and other dairy products more easily in the Canadian market.
- But Canada was not ready to give much concession regarding its dairy sector. Differences remained between the two countries on this issue also.
3. American ban on sale of alcohol
- Restrictions have also been imposed on the sale of American liquor in some parts of Canada. America sees this as discrimination against its goods.
- Apart from this, there has been a dispute between Canada and America for many years regarding lumber, especially Canadian softwood lumber.
Canada’s retaliatory tariffs on the US
After America’s new 50% tariff, Canada immediately announced retaliatory action.
Prime Minister Mark Carney said Canada will avoid US tariffs dollar for dollar Will respond accordingly.
That means, to the extent America imposes tariffs on Canadian goods, Canada will also impose tariffs on American goods of the same value. This has further increased the trade tension between the two countries.
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