"We have been attacked!" Canada responds strongly: tariffs equivalent to those of the U.S. will take effect on September 8. Emergency recall of the negotiation team at midnight.

Trade negotiations between Canada and the United States have collapsed, with both sides rapidly escalating tariff confrontations into the most severe trade conflict in recent years. According to CCTV News on August 23, Canadian Prime Minister Justin Trudeau delivered a nationwide televised address, fully outlining Canadas position following the breakdown of trade negotiations. Trudeau announced that in response to the United States imposing a 50% tariff on Canadian goods worth $20 billion, Canadas equivalent retaliatory tariffs would officially take effect on September 8, covering multiple sectors including dairy products, steel, home appliances, pulp and paper, and electronics. Previously, the United States had imposed a 50% tariff on approximately $20 billion worth of Canadian goods under Section 338 of the Smoot-Hawley Tariff Act, which took effect early on August 22, Eastern Time. In his nationwide address, Trudeau responded with strong language, claiming that Canada "has been attacked" and emphasized that Canada is reducing its dependence on the U.S. and "is becoming more robust." The negotiations breakdown took the market by surprise. Just before the collapse, officials from both sides were engaged in intensive discussions, with President Trump and Trudeau speaking several times this week. Canada had even sent signals to the provinces, preparing to place American alcoholic beverages back on the shelves. With Canada announcing the suspension of negotiations and initiating retaliatory measures, bilateral relations have dropped to a low point since Trump returned to the White House, casting a shadow over the prospects of renewing the USMCA. Trudeau emphasized resilience and dismissed any illusions about the U.S. Confronted with escalating trade confrontations, Trudeau stressed Canadas economic resilience in his speech. He stated that Canada is creating jobs at four times the rate of the U.S., with foreign direct investment reaching a twenty-year high, asserting that "Canada is becoming stronger and less dependent on the U.S." He made it clear that the Canadian government would introduce more countermeasures in the coming days. When discussing why the negotiations broke down at the last moment, Trudeau said that although both sides were close to reaching a mutually beneficial agreement earlier in the week, the U.S. presented new terms at the last minute that were economically unreasonable, unfair, and would greatly harm Canadian interests. These terms attempted to limit Canadas ability to strike new trade agreements with other countries and to protect its language, culture, and sovereignty. The proposed automotive industry provisions were deemed extremely unfair. Trudeau emphasized that Americans should understand that Canada will never trade its sovereignty and will never compromise on its core industries. He indicated that while Canada has consistently engaged sincerely with the U.S. in intensive negotiations to achieve a brand new comprehensive trade agreement, Canada has never harbored illusions, as the U.S. has changed. Canada is well aware that sometimes a U.S. signature "is just written in pencil" (meaning it can be arbitrarily altered and is unreliable). Trudeau mentioned that the U.S. has repeatedly ignored existing free trade agreements like the USMCA, sending a very bad signal to the outside world. In response to why retaliatory tariffs were chosen, he stated, "Because we have been attacked." The sudden collapse of negotiations came after both sides had released positive signals. According to reports, Canadas Minister responsible for U.S. trade, Dominic LeBlanc, along with Canadas chief negotiator Janice Charette, had been stationed in Washington for several weeks, engaged in intensive discussions with U.S. officials including Greer and Commerce Secretary Howard Lutnick. Trump and Trudeau also spoke several times this week. Just before the breakdown, Trudeau had informed the provincial premiers that if an agreement were reached, they should be ready to restock American alcoholic beverages. However, the negotiations suddenly collapsed on Friday night. Greer stated at a White House briefing, "Tonight, Canada rejected finalizing the trade agreement based on the terms agreed upon earlier this week." He characterized the failure of the negotiations as "Canada missing the opportunity to partner with the U.S., the fastest-growing economy in the G7." Reports cited a U.S. government official who indicated that during the negotiations, Canada sought tariff reductions in more areas, particularly in steel, aluminum, cars, and softwood lumber, but the U.S. was unwilling to agree. The official noted that the U.S. offer could have made Canada the most favored nation in tariff treatment among all major U.S. trading partners, and there are currently no arrangements for further negotiations. The new tariffs face legal challenges, further straining U.S.-Canada relations. Reports indicate that the new tariffs affect approximately $20 billion worth of Canadian goods, which accounts for just over 5% of Canadas total exports to the U.S., thus limiting the overall economic impact. However, since the relevant products do not enjoy preferential treatment under the USMCA, certain vulnerable sectors may face layoffs or even business closures. It was also reported that the legal provisions for these tariffs had never been used before and are expected to face legal challenges in the coming days. Just six months ago, the U.S. Supreme Court overturned several tariffs imposed by Trump under federal emergency powers. Specifically, on July 20, Trump signed a notice imposing a 50% tariff on hundreds of Canadian imports including red wine, hockey sticks, and cement under Section 338 of the Smoot-Hawley Tariff Act. The new tariffs were originally set to take effect on August 19 but were postponed to August 22. Additionally, previously imposed tariffs on Canadian steel, aluminum, automobiles, and lumber remain in effect. Prime Minister Trudeau stated that Canada would implement reciprocal measures and would introduce more actions in the coming days. He emphasized that Canadian negotiators did their utmost to defend Canadas interests until the very last moment. Reports suggest that opposing Trump was also a core promise of Trudeaus campaign. Polls show that the majority of Canadians support a tough stance against the U.S., with only 18% of respondents favoring concessions in exchange for an agreement. The breakdown of these negotiations has also brought U.S.-Canada relations to a low point in recent years. Since Trump returned to the White House, he has continued to pressure Canada, not only by imposing tariffs but also by threatening to "economically coerce" Canada into merging with the U.S. Meanwhile, the new tariffs will further complicate the renewal of the USMCA, and industries in Canada, such as steel, aluminum, automobiles, and lumber, may face increasing pressure due to the cumulative impact of these tariffs. This article is reproduced from "Wall Street Watch", edited by GMTEight.