First Thing: Trade dispute escalates as new Canadian tariffs on US goods come into effect

Stalemate between two nations leads to tit-for-tat measures on wide range of imports. Plus: Captain Kirk recalls 60 years of Star Trek Don’t already get First Thing in your inbox? Sign up here Good morning. Canada’s retaliatory tariffs on billions of dollars’ worth of US imports have come into effect, escalating a trade fight that has been marked by intensifying tensions between Donald Trump and Mark Carney. The tariffs range from 15% to 50% and apply to products covering $20bn in imports from the US. The measures target sectors including steel, dairy, appliances, agricultural equipment, and electronics. What tariffs did Trump impose on Canada? Last month the US president announced a new 50% tariff on cars and raw materials from Canada. He accused the country of “ripping off” the US “for years”. The US tariffs hit items such as hockey sticks and cement, affecting about 5.5% of Canadian exports to the US. Why have the two sides not reached agreement? Negotiations broke down in August, with Carney saying the US terms were unacceptable. The Canadian prime minister accused negotiators of introducing restrictions on Canadian trade deals with other countries at the 11th hour and making unacceptable “threats” to the French language. Carney said American negotiators viewed measures protecting the language as an “irritant”, while “in Quebec, these are rights”. How has Germany’s national government reacted to the result? A “shocked” and chastened chancellor, Friedrich Merz, has vowed to stay in office. Appearing ashen-faced in front of reporters in Berlin on Monday, he said: “We know that Germany carries special responsibility because of its history.” Will the AfD be able to form a state government? That remains unclear. In the 13 years of its existence, mainstream parties have maintained a “firewall” with the party, refusing any formal cooperation that would allow it to take power. That strategy has appeared to backfire, however, as the permanent “outsider” role appeals to legions of voters fed up with politics as usual. What are the wider implications for Europe? In this analysis, Jon Henley says Europe’s centrist politicians fear a continent-wide nationalist wave, fuelled by the persistent inability of mainstream governments to deliver for disillusioned voters hit by a spiralling cost of living crisis. Continue reading...

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