Canada vows to match US tariffs as trade talks collapse
Canadian Prime Minister Mark Carney suspends US trade negotiations following last-minute policy shifts, threatening dollar-for-dollar tariff retaliation.
Stock photo for illustration only, not from the actual event
- Canada suspends trade negotiations with the US ahead of Friday deadline
- Prime Minister Mark Carney vows dollar-for-dollar tariff retaliation
- US planned to impose 50% tariffs on nearly $20bn of Canadian goods
- US Chamber of Commerce warns higher tariffs will harm both economies
Trade negotiations between the United States and Canada collapsed abruptly after Canadian Prime Minister Mark Carney announced the suspension of talks just before the Friday night deadline, vowing to impose reciprocal tariffs on American goods on a dollar-for-dollar basis.
The dramatic turn of events follows threats from US President Donald Trump to slap a 50% levy on nearly $20bn worth of Canadian imports by August 19. This came despite a brief pause earlier in the week when Trump expressed optimism that both nations were close to finalizing a beneficial trade agreement.
Carney explained that last-minute alterations to the proposed US terms were completely unfair, economically unviable, and undermined the credibility of any potential deal, prompting him to order all Canadian trade negotiators to return to Ottawa immediately.
Stock photo for illustration only, not from the actual event
In response to the announcement, US Trade Representative Jamieson Greer released a statement claiming that Canada declined to finalize the agreement under previously agreed terms. Greer argued that new demands and sudden withdrawals from prior commitments by Ottawa dismantled the delicate balance achieved over recent days.
"Last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal."
Mark Carney
Prior to the breakdown, negotiators were reportedly discussing lowering US tariffs on Canadian steel and aluminum from 50% to 25%, and automobiles from 25% to 15%. In exchange, Canada was asked to lift provincial bans and restore American alcoholic beverages to store shelves, bringing friction back to the forefront after months of simmering tensions.
The deployment of the Depression-era Tariff Act of 1930 highlights how modern trade policy utilizes historical legislation to reshape bilateral agreements, directly threatening deeply integrated North American supply chains and millions of cross-border jobs.
With talks officially stalled, Canada now faces fresh 50% US tariffs affecting wine, dairy, cement, clothing, and hockey equipment, adding to existing levies on autos, lumber, and metals. Polling data from Abacus Data indicates that roughly 36% of Canadians support retaliatory measures, while 30% favor keeping diplomatic trade discussions alive.
Source: BBC World
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