Canada will match the 50% tariffs imposed by the United States “dollar for dollar”, Prime Minister Mark Carney said after the two countries failed to reach a trade deal by midnight on Friday.
The US tariffs will affect about US$20bn worth of Canadian products, or roughly 5% of what Canada ships to the US each year. The breakdown escalates an already tense trade conflict and raises questions about the future of the North American trade pact shared by Canada, the US and Mexico.
Why the negotiations broke down
Carney said Canadian officials had negotiated in good faith, but last-minute changes to the US proposed terms were “unfair” and “uneconomic”. He said the changes called into question the reliability of any agreement and that Canada’s objective had been to secure the best possible deal, not an agreement at any price or by any deadline.
US Trade Representative Jamieson Greer said Canada had declined to finalise a deal under terms agreed earlier in the week. He described the failure as a missed opportunity and said new Canadian demands and reversals of other commitments had disrupted the balance reached during the negotiations.
Related coverage: Canada vows dollar-for-dollar response after US tariffs.
What products and sectors are affected
The US duties will cover Canadian exports including hockey sticks and tongue depressors. A senior Trump administration official said Canada had sought concessions covering steel, aluminum, vehicles and lumber, but that the US had not agreed to provide them.
The two countries exchanged US$880bn in goods and services last year. Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the tariffs a “body blow” to North American competitiveness, saying they would raise costs for Americans while threatening Canadian customers, investment and small businesses.
What happens next
The tariffs had initially been scheduled to begin at 12.01am Wednesday, but the US extended the deadline by three days so negotiations could continue. No further talks have been planned.
Carney said the Canadian government would announce additional support for Canadian workers and businesses in the coming days. Ontario Premier Doug Ford backed a tariff-for-tariff response and said Ontario was prepared to contribute to protecting Canadian sovereignty and economic security.
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