Trade negotiations between Washington and Ottawa fell apart on Friday, paving the way for a fresh wave of 50% tariffs on roughly $20 billion in Canadian goods.
Negotiators from both countries had spent the week trying to hammer out an agreement, with signals at times pointing to a breakthrough. President Donald Trump had pushed back the original Wednesday deadline just hours before it took effect, saying a deal was close to being finalized. Canada’s trade minister for the U.S., Dominic LeBlanc, told reporters Thursday that an accord was “very close.”
But on Friday, each side blamed the other for the breakdown. The tariffs, which cover Canadian exports including wine, furniture, dairy products, cement, clothing, fishing rods, and hockey equipment, went into effect Saturday morning.
Canadian Prime Minister Mark Carney issued a statement Friday expressing disappointment. “That progress has not been enough to meet our objectives for Canadians,” he said, adding that “last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.” Carney vowed that Canada would retaliate “dollar for dollar.”
U.S. Trade Representative Jamieson Greer countered in a post on X early Saturday that “Canada declined to finalize the trade deal under the terms agreed earlier this week.” Greer said the U.S. had “agreed to provide even better treatment to Canada, offering significant tariff reductions on steel, aluminum, autos, and lumber.” However, he wrote, “Canada is continuing to maintain its prolonged retaliation against the United States, including, among other things, flat-out prohibitions on certain American goods and services.”
The tariff measures stem from three proclamations signed by the Trump administration in July, which imposed additional 50% duties on a range of Canadian products. The administration said at the time that the move was a response to trade discrimination against U.S. goods such as motor vehicles, alcohol, and dairy. The tariffs were authorized under Section 338 of the Tariff Act of 1930, a rarely used provision that permits the president to impose duties of up to 50% on products from countries found to be discriminating against U.S. commerce. It had not been invoked since 1949.
The failure to reach a deal adds another layer of friction to an already strained relationship between the two neighbors. Canada and the U.S. have also been negotiating over their trilateral trade pact with Mexico, known as the USMCA, which was not renewed in July amid concerns about U.S. trade deficits. Trump once called that agreement “the best agreement we’ve ever made.”
With the talks now collapsed, the immediate focus shifts to Canada’s promised retaliation and the broader implications for cross-border trade. The prospect of further escalation remains, as both governments dig in on their positions.
