In brief
Prime Minister Mark Carney announced that Canada will impose dollar‑for‑dollar tariffs against the United States after last‑minute changes in the proposed trade deal. Canada’s trade ministers suspended negotiations, directing officials back to Ottawa. The US trade representative responded that the US will take action against Canada’s counter‑tariffs. The two countries have been at odds over steel, aluminium, cars and other goods, with significant domestic political support for retaliation. The fallout threatens to disrupt supply chains and costs for businesses on both sides of the border.
A fresh wave of US tariffs on Canadian goods has taken effect at midnight on Saturday, after trade talks floundered at the last moment.
Prime Minister Mark Carney said he would impose reciprocal duties on U.S. goods “dollar for dollar”, following the suspension of negotiations as the Friday deadline approached.
Carney condemned the United States’ last‑minute changes in the proposed deal as unfair and uneconomic, undermining confidence in any agreement.
U.S. President Donald Trump had threatened to impose a 50% levy on nearly 20 billion dollars of Canadian imports by 19 August. He had previously paused the tariffs, suggesting a trade deal was close to completion.
However, minutes before the deadline, Carney declared the progress insufficient to meet Canadian objectives, and ordered negotiations to be cancelled.
The U.S. trade representative responded that Canada had declined the deal on the terms agreed earlier, citing new demands and walk‑backs that upset the balance sought.
Negotiation talks had already involved reducing U.S. duties on Canadian steel, aluminium and automotive exports. Canada had asked provinces to restore U.S. alcohol to store shelves.
The breakdown threatens to re‑egress tariffs that have been in place for a year, including those on wine, dairy, cement, clothing and hockey gear.
Ontario Premier Doug Ford supported a strong, reciprocal response, saying Canada should resist “tariff for tariff, dollar for dollar.”
The trade dispute is rooted in broader U.S. tariff policy under Trump, which has challenged long‑standing trade relations between the two nations.
Canadian businesses and stakeholders have argued that higher tariffs would hurt both economies. A recent poll found 36 % of Canadians favor retaliation, while 30 % want negotiations to continue.
The U.S. Chamber of Commerce warned that higher tariffs would damage the economy, raise costs for families, disrupt supply chains and threaten jobs tied to the broader trade agreement.
The new U.S. tariffs are invoked with a historic law, and they coexist with existing duties on steel, aluminium, automobiles and lumber.
Both sides must decide whether to allow unilateral actions to undermine their long‑term trade relations.
