U.S. imposes 50% tariffs on $20 billion worth of Canadian products. Canada will impose retaliatory tariffs

WASHINGTON (AP) — The United States imposed 50% tariffs on $20 billion worth of Canadian products early Saturday, and Canada said it would retaliate beginning Sept. 8 after last-ditch negotiations failed to resolve the latest strain in relations between the historic allies.

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.

He disclosed that Canada had been willing to drop remaining retaliatory tariffs on steel, aluminum and autos if the United States substantially lowered its own, and to encourage provinces to restore U.S. alcohol sales.

But he said Washington's final demands went too far, saying, "They asked too much and offered too little," Carney said.

"Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the U.S. 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 shortly before midnight.

Carney blamed the Republican administration for the breakdown, saying "last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal."

No further talks are planned.

The tariffs were initially supposed to kick in at 12:01 a.m. Wednesday. Trump extended the deadline for three days to allow talks to continue, but the countries could not reach an agreement in time.

"Canada told the Americans in advance that if these tariffs landed, it would stop negotiating and retaliate,'' said Barry Appleton, senior fellow at the Center for International Law at New York Law School. "The American trade representative said publicly he would not tolerate retaliation. Both sides have now committed themselves in public, which is how escalation stops being a choice."

To punish Canada, he reached back to the Great Depression, invoking Section 338 of the Tariff Act of 1930 to threaten 50% tariffs on products that account for about 5% of Canadian exports to the United States.

Section 338, which has never been used before to impose tariffs, authorizes the president to slap import taxes of up to 50% on imports from countries that have discriminated against U.S. businesses.