Kathmandu— Canada will respond to newly imposed United States tariffs with reciprocal measures, Prime Minister Mark Carney announced Friday, following the breakdown of three days of intense trade negotiations. The US enacted duties of up to 50% on approximately 5% of Canada’s exports, targeting goods like plywood, cement, wine, and hockey sticks, citing unfair trade practices. This escalation threatens a full-blown trade war between the two nations after a dispute dating back several years was recently reignited with Trump's return to office last year.

Tariff Escalation

The Trump administration invoked Section 338 of the Tariff Act of 1930, authorizing tariffs up to 50% on imports from countries allegedly engaging in unfair or discriminatory trade practices. These tariffs went into effect just after midnight Saturday. While negotiations had shown some progress – including discussion of reviving the Keystone XL pipeline project – last-minute changes to proposed terms by the US led to the collapse of talks, according to Carney.

Canadian Response

Canada’s response will be a “dollar-for-dollar” implementation of equivalent tariffs on American goods. Prime Minister Carney stated that these measures are intended to protect Canadian workers and businesses from the impact of the US duties. He also criticized the last-minute changes proposed by the US as unfair and uneconomic, raising concerns about the reliability of future agreements.

Business Reaction

The collapse of trade talks has drawn criticism from business leaders on both sides of the border. Candace Laing, president of the Canadian Chamber of Commerce, described the situation as “a body blow to North American competitiveness,” warning that Americans will face increased costs and Canada could lose customers, investment, and small businesses.

Sticking Points in Negotiations

According to a senior Trump administration official cited by AP, Canada had been seeking concessions from the US regarding previously imposed tariffs on steel, aluminum, automobiles, and lumber. However, the US has so far refused to offer such concessions. US Trade Representative Jamieson Greer stated that despite offering Canada “the best treatment of any major exporter to our market,” new demands from Ottawa had disrupted a delicate balance reached in recent discussions.

Prime Minister Carney has pledged to introduce additional support measures for Canadian workers and businesses, as well as explore opportunities to diversify the country’s international partnerships.

(With inputs from RT)

Originally published on abcnews.com.np.