President Donald Trump has announced plans to increase tariffs on Canadian automobiles, auto parts, and steel, prompting Canada to prepare retaliatory tariffs and support measures for businesses. The move signals a potential escalation in the ongoing trade conflict while Canada aims to maintain negotiation channels.
According to reports from Yonhap News and AP, Mark Carney, a member of the Canadian Cabinet, is expected to unveil a response plan that includes retaliatory tariffs against the U.S. This announcement follows Trump's warning to Canadian leaders to "be obedient" and his declaration that tariffs on Canadian products would rise to 50% starting January 1.
Carney previously indicated that Canada would consider targeted retaliatory measures to protect its workers and businesses rather than a one-to-one response to U.S. tariffs. CBC reported that various items are being reviewed for potential Canadian retaliatory tariffs, and suitable Canadian alternatives are readily available.
The Canadian government is also preparing domestic support measures in anticipation of a prolonged trade war with the U.S. There is a belief that the conflict may continue beyond the upcoming U.S. midterm elections in November, reducing the likelihood of negotiations resuming in the short term.
Bloomberg, citing sources, reported that the support measures are expected to include expanded unemployment benefits and loan programs for businesses affected by tariffs. One source described these measures as similar to economic support programs implemented during the COVID-19 pandemic.
These support measures are designed to remain in place not only during the ongoing trade dispute but also throughout the remainder of Trump's term if necessary.
However, communication between the two countries has not completely ceased. A Canadian government official stated on the 24th that Dominic LeBlanc, Canada’s Minister of International Trade, has been in contact with U.S. Trade Representative Jamie Grier.
Negotiations between the two countries had continued since Trump warned of tariffs on Canada last month, but discussions were halted on the night of the 21st. The U.S. imposed a 50% tariff on approximately $20 billion worth of Canadian products starting on the 22nd, while Canada announced retaliatory tariffs on U.S. steel, dairy products, appliances, agricultural machinery, and pulp, effective September 8.
Reports suggest that the breakdown in negotiations was influenced by U.S. Secretary of Commerce Howard Lutnick's hardline stance. Sources indicated that Lutnick believed the existing proposal was too favorable to Canada and actively supported U.S. metal companies seeking to retract concessions.
Canadian officials criticized Lutnick for effectively changing the rules of the negotiation process. In contrast, White House officials denied claims that Lutnick was responsible for the negotiations' collapse, asserting that it was Canada that made demands outside the existing framework at the last minute.
Canadian sources acknowledged that while Lutnick's involvement did not help the negotiations, it was not the direct cause of the breakdown, citing fundamental issues with the goals presented by the U.S. at the negotiation's conclusion.
Bloomberg analyzed that Lutnick has been actively involved in trade issues where he believes he can secure more favorable agreements for the U.S., and this negotiation breakdown is another example of how he has contributed to escalating tensions within the Trump administration.
* This article has been translated by AI.
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