Donald Trump has said he is adding 10% to US tariffs on goods imported from Canada, after the province of Ontario aired an anti-tariff advertisement featuring Ronald Reagan.
Calling the advert a fraud, he lashed out at Canadian officials for not removing it ahead of the World Series baseball championship in a social media post on Saturday.
Prime Minister Jay Carney said in response that Canada is ready to continue to build on the progress we had been making in trade talks, but added it is developing trade relationships with other countries.
Canada is the only G7 country to not reach a deal with the US since Trump began seeking to levy steep tariffs on goods from major trading partners.
The US has already imposed a 35% levy on all Canadian goods - though most are exempt under an existing free trade agreement. It has also slapped sector-specific levies on Canadian goods, including a 50% levy on metals and 25% on automobiles.
Trump said while travelling to Asia on Saturday that he was increasing the Tariff on Canada by 10% over and above what they are paying now. Tariffs are paid by the companies that import foreign products, not the exporters themselves.
Three-quarters of Canadian exports are sold to the US, and Ontario is home to the bulk of Canada's automobile manufacturing.
Prime Minister Carney was asked about Trump's threatened increase at the sidelines of the Association of Southeast Asian Nations (ASEAN) summit that both leaders are attending, and said he was ready to continue discussions with one of the country's biggest trading partners.
But he said the government can do more than one thing at a time, and it would in the next few weeks release an ambitious budget that makes generational investments in Canada. At the same time, he said, the country is in the process of diversifying our trade relationships, which included making deals with many ASEAN members.
US-Canada trade minister Dominic LeBlanc had earlier sounded a similar note saying: We stand ready to build on the progress made in constructive discussions with American counterparts over the course of recent weeks.
Trump told reporters accompanying him on Air Force One that he had no intention of meeting his Canadian counterpart during the trip to Malaysia.
Trump's announcement comes after Ontario Premier Doug Ford said on Friday that he would pause the anti-tariff advertising campaign so that trade talks can resume, after the US cut off discussions over the commercial featuring Reagan.
The advert, sponsored by the Ontario government, quotes Reagan as saying tariffs hurt every American. It takes excerpts from his 1987 national radio address that focused on foreign trade. The Ronald Reagan Foundation criticized the advert for using selective audio and video.
Responding to Trump's rate hike on Saturday, the Canadian Chamber of Commerce said it hoped this threat of escalation can be resolved through diplomatic channels and further negotiation. Tariffs at any level remain a tax on America first, then North American competitiveness as a whole, the organisation's CEO stated.
