Canada has announced it will match U.S. tariffs on its goods "dollar for dollar" following a breakdown in trade negotiations. Prime Minister Mark Carney stated that last-minute changes to the U.S. proposed terms were "unfair, uneconomic, and called into question the reliability of any deal," leading him to suspend talks and direct negotiators back to Ottawa.
This decision comes after President Donald Trump had threatened a 50% levy on nearly $20 billion (C$28 billion) of Canadian imports, a move he had temporarily paused earlier in the week, suggesting a deal was close. The new U.S. tariffs, which took effect at midnight on Saturday, will apply to a range of products including wine, dairy, cement, clothing, and hockey equipment, in addition to existing tariffs on steel, aluminum, autos, and lumber.
Negotiators had been in intensive talks since July, reportedly discussing a reduction in U.S. tariffs on Canadian steel and aluminum from 50% to 25%, and on autos from 25% to 15%. In return, Canada was asked to restore U.S. alcohol to store shelves. The breakdown marks a significant shift from earlier optimism, with both sides previously indicating a beneficial trade deal was within reach.
Businesses and stakeholders on both sides of the border have expressed concern, with the U.S. Chamber of Commerce warning that higher tariffs would damage both economies, increase costs for U.S. families, disrupt supply chains, and jeopardize millions of American jobs. A poll by Abacus Data indicated that around 36% of Canadians would support retaliation, while 30% would prefer continued negotiations. U.S. trade representative Jamieson Greer had previously stated the U.S. would "not tolerate" counter-tariffs and would "take action."