Canada Vows Dollar-for-Dollar Tariffs as US Trade Talks Collapse
A fresh wave of United States tariffs on a wide range of Canadian goods came into effect at midnight on Saturday, after trade negotiations between the two countries broke down at the last minute.
Canadian Prime Minister Mark Carney announced the suspension of talks shortly before Friday night's deadline, saying he would impose reciprocal tariffs on US goods “dollar for dollar”. He criticised last-minute changes in the US position as “unfair, uneconomic, and called into question the reliability of any deal”.
Negotiators had been engaged in intense discussions since July, after President Donald Trump threatened to impose a 50 per cent levy on nearly $20bn (C$28bn) of Canadian imports by 19 August. Trump had temporarily paused those tariffs earlier in the week, saying the two sides were close to signing a deal that was “very good” for both countries.
But minutes before the deadline, Carney said that while “important progress” had been made, it was “not enough to meet our objectives for Canadians”. He directed negotiators to return to Ottawa.
US Trade Representative Jamieson Greer responded in a statement on X, saying Canada declined to finalise the deal under terms agreed earlier this week. Greer added that new demands and walk-backs by Canada had “upended the careful balance” reached in recent days, despite the US offering Canada the best treatment of any major exporter to its market.
The breakdown marks a sharp shift from optimism earlier in the week, when both sides signalled that a deal was within reach. Negotiators were reportedly discussing a pact that would reduce US tariffs on Canadian steel and aluminium from 50 to 25 per cent, and on Canadian autos from 25 to 15 per cent. In exchange, Carney had asked Canadian provinces to restore US alcohol to store shelves.
Tensions between the two major trading partners have simmered since Trump returned to office in January last year and launched a broad programme of tariffs, disrupting decades of free trade between Canada and the US.
With talks now suspended, Canada faces new 50 per cent US tariffs imposed under the Tariff Act of 1930, a Depression-era law. These apply to goods including wine, dairy, cement, clothing and hockey equipment, and are in addition to existing tariffs on Canadian steel, aluminium, autos and lumber.
Doug Ford, premier of Ontario, Canada's largest province, said Carney had his “full support for a strong response—tariff for tariff, dollar for dollar”.
Canada has sought for over a year to secure a deal that would reduce or remove US tariffs on key sectors. The US, meanwhile, has demanded that Canada drop its remaining retaliatory tariffs on American autos, adjust dairy quotas to allow greater access for US cheese producers, and lift the ban on US alcohol sales imposed by most provinces last year.
Business groups on both sides of the border had urged a deal, warning that higher tariffs would damage both economies, raise costs for US families, disrupt supply chains, and jeopardise millions of jobs dependent on cross-border trade.
