US set to impose 50 per cent tariffs on $20 billion of Canadian goods

Donald Trump. File pic

The United States was set to impose 50% tariffs on $20 billion worth of Canadian products early Saturday after last-ditch negotiations failed to resolve the latest strain in already tense relations between the historic allies.

"Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the US 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," U.S. Trade Representative Jamieson Greer said in a statement read to reporters on a press call shortly before midnight.

Canadian Prime Minister Mark Carney responded, "Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal."

President Donald Trump's import taxes will hit about 5% of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors.

But the political impact will likely be even bigger than the economic fallout. The countries sold each other $880 billion worth of goods and services last year.

The tariffs were initially supposed to kick in at 12:01 a.m. Wednesday.

But Trump extended the deadline for three days to allow talks to continue, but the two countries still could not reach an agreement in time.

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