Canada's Carney faces political test after breaking off Trump trade talks

Canadian Prime Minister Mark Carney has taken a high-stakes gamble, suspending trade talks with US President Donald Trump and choosing to retaliate rather than sign a deal that appeared within reach. The move makes him one of the first world leaders to walk away from the negotiating table with the White House, and the outcome will be closely watched internationally.

Both sides blame the other for last-minute changes that derailed the tentative agreement. Carney now faces the task of convincing Canadians that economic pain is worth enduring for a better long-term deal. Canada sends roughly 70% of its exports to the US, and the dispute will hit businesses on both sides of the border, particularly in US states like Michigan, Kentucky, Indiana and Ohio, which rely heavily on Canadian trade.

Public appetite for retaliation

Polling suggests many Canadians are ready to fight back: about 36% would support retaliatory tariffs, while 56% want the federal government to hold firm and make no further concessions. Canadians have already cut back on travel to the US, costing the American travel industry roughly C$3.3bn. Several provinces have pulled US alcohol from store shelves, causing US wine exports to Canada to fall 78% and American spirits exports to drop by more than 70%.

How the deal collapsed

Carney said the latest US proposed terms were unfair and undermined confidence in any agreement, while US Trade Representative Jamieson Greer pointed to new demands and reversed commitments from Canada. Ontario Premier Doug Ford, whose province has been hit hardest by the tariffs, voiced full support for Carney's tougher stance, and Conservative opposition leader Pierre Poilievre also backed the decision to reject one-sided tariffs. Canada now waits to see how Trump will respond.