After the collapse of Canada-U.S. trade talks, Canadian officials announced on Tuesday that, as a reciprocal response, Canada will impose tariffs ranging from 15% to 50% on over 700 U.S. goods starting September 8. In addition to doubling the tariffs on U.S. steel and aluminum to 50%, the retaliatory tariffs are focused on categories such as paper products, building materials, household appliances, and agricultural goods including dairy and seafood. According to U.S. trade data, the latest U.S. tariffs cover about 5% of goods the U.S. imported from Canada last year, while Canada’s tariffs apply to approximately 6% of goods the U.S. exports to Canada. Canadian Industry Minister Mélanie Joly hinted that the choice of these tariffs took into account the upcoming U.S. midterm elections, stating they were “strategically and wisely” applied “to products that would impact key U.S. states.” High tariffs imposed by Canada on American goods could weaken demand for those products in Canada, forcing employers to cut worker hours or even lay off staff. Trump threatened to further increase tariffs on Canada, including doubling the tariff on Canadian cars and auto parts to 50% starting January 1 next year. He also threatened to rename Lake Ontario “Lake America.” If Trump continues escalating the trade war, Canada has other tools at its disposal beyond tariffs, such as restricting critical exports to the U.S., including energy, electricity, and critical minerals.

Multiple sources have confirmed Canada’s explanation for why the Canada-U.S. negotiations broke down. Specific reasons include: Lutnick’s intervention during the talks under pressure from certain U.S. industries, demanding higher tariffs on Canadian goods and excluding trucks from the agreement; the U.S. requirement that Canada apply U.S. tariff rates to third countries regardless of any existing trade agreements with other nations; and the U.S. insistence on retaining full unilateral power to unilaterally change its tariffs on Canada at any time, without being bound by any agreement—giving rise to the so-called “pencil signature” concept.

Image source: internet

Original article: toutiao.com/article/1874568181286155/

Disclaimer: This article represents the personal views of the author