Canadian Prime Minister Mark Carney announced dollar-for-dollar retaliation against 25% tariffs imposed by the United States on Canadian goods, set to take effect in early March after negotiations collapsed. Ottawa walked away from talks after concluding the United States was demanding too much in exchange for tariff relief, including language that would have restricted Canada’s ability to make trade deals with other countries, which Carney called a question of sovereignty. Canada is uniquely vulnerable to U.S. pressure with nearly three-quarters of its goods exports going to the United States, whose economy is roughly 10 times larger. Carney said his government understood before many others that America would transform all its commercial relationships, accusing Washington of using economic integration as a weapon. The trade dispute has become a test of whether Carney’s strategy of resistance can work and whether other U.S. allies might follow Canada’s approach.
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