Canada and US halt trade talks as Ottawa vows dollar-for-dollar tariff response
New US tariffs on Canadian goods took effect after last-minute trade talks collapsed, prompting Canadian Prime Minister Mark Carney to promise matching retaliatory tariffs.
Canadian Prime Minister Mark Carney announced he was suspending trade negotiations with Washington after the US made last-minute changes to proposed deal terms. Carney called the changes unfair and uneconomic, saying they undermined confidence in the reliability of any agreement. He said Canada would respond to new US tariffs with reciprocal measures on a dollar-for-dollar basis.
The talks had been ongoing since July, after President Donald Trump threatened a 50% tariff on nearly $20bn worth of Canadian imports by 19 August. Earlier in the week, Trump had paused those tariffs, expressing optimism that a deal beneficial to both countries was close.
Just before the deadline, however, Carney said that while meaningful progress had been made, it fell short of Canada's objectives, and he ordered negotiators to return to Ottawa. US Trade Representative Jamieson Greer responded that Canada had declined to finalize a deal already agreed upon earlier in the week, introducing new demands instead.
New tariffs take effect
Following the breakdown, the US imposed new 50% tariffs on a range of Canadian goods under the Depression-era Tariff Act of 1930, covering wine, dairy, cement, clothing and hockey equipment. These come on top of existing tariffs already affecting Canadian steel, aluminium, autos and lumber.
Ontario Premier Doug Ford voiced full support for a strong Canadian response. Negotiators had reportedly been discussing lowering US tariffs on Canadian steel and aluminium from 50% to 25%, and on autos from 25% to 15%, in exchange for Canadian provinces restoring US alcohol sales.
The US Chamber of Commerce had previously warned that higher tariffs would harm both economies and threaten millions of jobs tied to trade among the US, Mexico and Canada. Polling suggested roughly a third of Canadians supported retaliation, while US officials warned Washington would not tolerate counter-tariffs.
