Kathmandu— The Canadian government announced Tuesday it will implement retaliatory tariffs on approximately 700 American products, ranging from steel and aluminum to dairy and farm equipment, after the United States imposed its own tariffs on Canadian imports. The move follows the collapse of trade talks between the two nations last Friday, with both sides blaming each other for failing to reach a comprehensive agreement. Canada’s Finance Minister Francois-Philippe Champagne stated the tariffs, which will take effect September 8th, are designed to protect Canadian industries impacted by US measures and will match them “dollar for dollar, rate for rate.”

Escalating Tariff Dispute

American steel and aluminum will be subject to a 50% tariff, while other goods—including dairy products, appliances, and farm equipment—will face tariffs of 25%. These measures will cover around $20 billion in US imports. The initial round of tariffs from the United States targeted approximately $20 billion worth of Canadian imports, encompassing items like wine, cement, plywood, clothing, and hockey equipment. This escalation began after trade negotiations broke down, with each country accusing the other of making last-minute alterations to a proposed trade agreement.

Trump’s Grievances and Future Threats

Former US President Donald Trump has repeatedly accused Canada of “ripping off the United States” for years, citing a trade deficit that he claims is $60 billion—though his own trade representative places the figure at $48.3 billion. He also objects to Canada’s protectionist tariffs on agricultural products like dairy, poultry, and eggs, which can reach as high as 200% above certain quotas. Trump announced plans to further increase tariffs on Canadian auto imports to 50% starting January 1st, 2027, doubling the current rate of 25%, while encouraging companies to “Build in the US” to avoid these charges.

Canadian Response and Perspective

Canadian Prime Minister Mark Carney argued that the trade deficit is largely due to American imports of Canadian oil, gas, and electricity. "I don’t think they want us to stop sending it," he commented on Saturday. Finance Minister Champagne emphasized that Canada's tariffs are intended as a direct response to protect its own industries from US measures. Carney acknowledged the shift in approach from Washington, stating, “We recognized from the start that America has changed.”

History of Trade Tensions

Trade tensions between the United States and Canada have existed since Trump’s first term in office, but were reignited upon his return to power last year. He initiated a broad tariff campaign targeting major trade partners including China, the European Union, Japan, and Mexico. Canada has also imposed tariffs on American automakers who relocated factories from Canada back to the United States, directly challenging Trump's domestic reindustrialization efforts.

The retaliatory tariffs are set to take effect September 8th, with further developments dependent on future negotiations between the US and Canada.

(With inputs from RT)

Originally published on abcnews.com.np.