Trade talks between the U.S. and Canada collapsed late Friday, triggering 50 percent tariffs on $20 billion of Canadian goods. Canada vows dollar-for-dollar retaliation starting September 8.
The United States and Canada failed to reach a trade deal late Friday night, and new 50 percent tariffs on roughly $20 billion worth of Canadian goods went into effect at midnight. The collapse ended nearly two weeks of intense negotiations and marks one of the most serious economic rifts between the two neighbors in years.
Canadian Prime Minister Mark Carney suspended the talks just before the deadline and ordered negotiators back to Ottawa, saying the United States changed terms at the last minute. U.S. Trade Representative Jamieson Greer fired back that Canada walked away from a deal both sides had already agreed to earlier in the week.
The breakdown was a dramatic turn from Tuesday, when President Donald Trump paused the tariffs for three days and declared on social media that the two sides "have a DEAL!" Officials on both sides sounded upbeat through Thursday, when Canada's trade minister met with Greer for hours.
Negotiators remained at the U.S. Trade Representative's office past 10:30 p.m. Friday before the talks finally collapsed. Carney said the United States introduced new demands in the final hours, including limiting tariff relief to autos while excluding medium- and heavy-duty trucks, restricting Canada's ability to strike trade deals with other countries, and limits on Canadian protections for language, culture, and sovereignty.
"In recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits for Canada, and called into question the reliability of any deal," Carney said. "In short, they asked too much, and they offered too little."
The 50 percent duties apply to a wide range of Canadian imports, from hockey sticks and building materials to liquor and certain clothing. The White House imposed them under Section 338 of the Tariff Act of 1930, a provision that allows duties of up to 50 percent on trading partners that discriminate against U.S. commerce -- and one that has never been deployed before.
Greer said the United States had offered "significant tariff reductions on steel, aluminum, autos, and lumber" and would have given Canada the best treatment of any major exporter to the American market. "This is a missed opportunity for Canada to partner with the United States," he said.
Reports earlier in the week said American negotiators had agreed to cut tariffs on cars and metals from 25 percent to 15 percent. Canadian officials had also been pushing to have the Section 338 tariffs dropped entirely.
Carney announced Canada will retaliate with tariffs of its own, matching the U.S. duties "dollar for dollar to protect our workers and businesses." The counter-tariffs will target steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, and are set to take effect September 8.
Asked why it felt like Canada was "going to war," Carney replied: "Because we were attacked." He added, "Canada has what the world wants. And we will not allow any nation to determine our future."
Canadian premiers largely lined up behind the response. Ontario's Doug Ford backed "tariff for tariff, dollar for dollar," British Columbia's David Eby said Canada would "keep fighting for as long as it takes," and Manitoba's Wab Kinew urged the federal government to fight back. Alberta's Danielle Smith, whose province is most exposed to energy trade, called instead for restarting negotiations.
Greer said the United States has no new talks planned with Canada and will respond to any Canadian retaliation. "We've said enough, and so we've taken countermeasures," he said.
The business community is warning of real economic pain on both sides of the border. The U.S. Chamber of Commerce said higher tariffs would damage both economies, drive up costs for American families, disrupt supply chains, and put at risk the 13 million American jobs tied to the North American trade pact. The Canadian Chamber of Commerce called the breakdown "a body blow to North American competitiveness in this self-defeating trade saga."
Legal challenges to the Section 338 tariffs are all but certain. For now, the administration is holding firm, betting that standing up for American workers and industries strengthens the U.S. hand at the table -- and resonates with voters this November.
Trade talks between the U.S. and Canada collapsed late Friday, triggering 50 percent tariffs on $20 billion of Canadian goods. Canada vows dollar-for-dollar retaliation starting September 8.
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