In a significant development, the White House said that the United States is banning dairy products, most alcoholic beverages and motorcycles from Canada as the trade war between the two countries escalates. The White House further added that the ban will take effect in three weeks and comes after Canada imposed retaliatory tariffs on USD 20 billion in US imports earlier on Tuesday.
In this regard, US President Donald Trump moved to shut Canadian products out of large, long-term US government contracts as Canada’s retaliatory tariffs took effect and Prime Minister Mark Carney vowed to speed efforts to reduce the country’s dependence on the United States. Amid these developments, Trump directed the US General Services Administration to declare Canadian products ineligible for those contracts until Canada allows “full and fair reciprocity” for American products.
It should be noted that Carney earlier had said that Canada’s strategy was about becoming more independent and it is about ensuring that no country can hold us hostage and that we can live how we want to live.”
Moreover, Canada is also exploring ties with the European Union that could stop just short of membership, a Canadian official familiar with the discussions said. According to the official, this could include expanding existing agreements, negotiating a new treaty or creating other forms of cooperation.
The official further added that Canada is already consulting provinces, territories and labor groups about what a deeper relationship with the EU could look like, but no model has been chosen. The official spoke on condition of anonymity because they were not authorized to discuss the talks publicly.
Canada looks for trade beyond US
In the meantime, Carney also acknowledged the trade actions would cause short-term pain but said they would push Canada to move faster on investment, infrastructure and trade diversification.
It is worth mentioning here that more than 70 per cent of Canadian exports still go to the United States, underscoring the scale of Carney’s push to diversify trade. He stated that Canada’s exports to other countries are rising sharply and are on track to double over the next decade.
Canada defended retaliation as Trump responds
Carney also defended the retaliation, saying Canada could not let American goods enter tariff-free while Canadian companies face US tariffs. He added that Canada was not seeking to escalate the confrontation, he said, but the tariffs were necessary to protect Canadian workers.
Carney stated that the larger problem was what Washington had sought in the failed negotiations. “The most fundamental issue is that the cumulative US demands revealed that they wanted us to become even more reliant on them, not less,” he said.
With inputs from AP
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