By Promit Mukherjee and Bhargav Acharya
OTTAWA, Aug 22 (Reuters) - Prime Minister Mark Carney said on Saturday that Canada would impose tariffs starting September 8 on imports of U.S. steel, electronics and other products in retaliation for President Donald Trump's 50% tariffs that took effect at midnight.
After days of intense negotiations, the two countries did not reach a trade deal late Friday, worsening a delicate relationship between the longtime trade partners and allies and complicating the future
of the continental free trade pact known as the U.S.-Mexico-Canada Agreement.
Trump's new tariffs hit sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment, and cover some $20 billion of Canadian exports to the U.S. These duties do not exempt Canadian products under the USMCA, which has shielded most Canadian exports to the U.S. in the last 18 months.
"Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses," Carney said at a news conference.
Carney is one of the few global leaders to retaliate against U.S. tariffs and has pledged to forge new trade and military alliances, despite Canada's dependence on the United States for nearly 70% of its exports.
Canada will impose tariffs on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, along with some products the U.S. previously targeted in Canada, Carney said from Ottawa's Parliament building. The government will release details on its response in the coming days, he said.
"We cannot accept what they have offered, and we will not give what they have asked," Carney said.
Trump had expressed hope that a deal with Canada could happen on Friday.
NEW U.S. TERMS DERAILED DEAL: CARNEY
But Carney said the U.S. administration's last-minute demands halted progress.
"In recent days, the U.S. proposed new terms that were uneconomic, unfair, and undermined the net benefits to Canada, calling into question the reliability of any deal," he said, adding these demands included curtailing Canada's ability to forge new trade deals.
Carney said Canada would announce support measures next week for industries hit by the new U.S. duties, adding these measures could last years.
U.S. Trade Representative Jamieson Greer told Fox News on Saturday that no new talks are planned with Canada.
"We're moving forward with measures that respond to Canadian retaliation," Greer said. "They've always had the best deal, and they still would have an even better deal, but they didn't want that."
The White House, the U.S. commerce secretary's office and the U.S. trade representative's office did not immediately respond to requests for comments.
The new U.S. tariffs cover around 5% of Canada's exports to the U.S. They could expose some vulnerable industries such as softwood lumber and wine to severe damage and lead to job losses and business closures, trade experts have said.
"We will be mobilizing our network of businesses in all regions and all sectors to brace for impact and make the best of a bad situation," said Candace Laing, CEO of the Canadian Chamber of Commerce.
Ontario Premier Doug Ford, one of the most vocal opponents of U.S. tariffs, supported Carney's decision to retaliate.
"I'm glad he didn't sign that deal because it was a bad deal. It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector, and manufacturing sector," Ford told reporters on Saturday.
STICKING POINTS
One of the main sticking points was the treatment of larger vehicles.
Three sources said Canada wanted favorable tariff terms proposed for light-duty vehicles to extend to medium- and heavy-duty trucks, something the U.S. resisted. Carney said the U.S. position would have excluded Canadian-made models, including Ford's F-350, F-450 and F-550 trucks and General Motors' Silverado, making Canadian production less competitive.
There were also U.S. proposals that affected Canadian culture, language and sovereignty, Carney said, without elaborating.
Carney was elected last year on a promise to be a tough negotiator with Trump, and remains broadly popular. Polls show most Canadians oppose making any concessions to the U.S.
"Canadians must stand united to defend our country against these unfair attacks on our jobs and businesses," Pierre Poilievre, the leader of the official opposition Conservative Party, said in a statement.
(Reporting by Promit Mukherjee, Chibuike Oguh, Bhargav Acharya and David Shepardson, editing by Ross Colvin, Caroline Stauffer, Rod Nickel )
