Canada Vows Dollar-for-Dollar US Tariff Response

Canada Suspends Trade Negotiations With the US

A new round of US tariffs on Canadian products has taken effect after last-minute negotiations between Ottawa and Washington failed to produce an agreement.

Canadian Prime Minister Mark Carney announced that discussions with the US would be suspended, while warning that Canada was prepared to respond to American tariffs on a dollar-for-dollar basis.

Carney said changes made to the proposed US terms shortly before the deadline were unacceptable and could undermine confidence in any future agreement.

Talks Break Down After Weeks of Negotiations

The two countries had been working intensively toward a trade agreement since July. The negotiations followed President Donald Trump's threat to impose a 50% tariff on almost $20 billion worth of Canadian imports.

Those measures had been temporarily put on hold earlier in the week after Trump indicated that the two governments were close to reaching what he described as a mutually beneficial agreement.

However, Canada ultimately decided that the progress achieved during the negotiations did not go far enough.

Carney Says US Demands Were Unacceptable

Carney said Canadian negotiators had made meaningful progress but failed to secure the outcomes Ottawa wanted.

He argued that the latest changes proposed by Washington were economically damaging and unfair, while also raising concerns about whether a broader trade agreement could be relied upon in the future.

Canadian negotiators were subsequently instructed to return to Ottawa as the government reassessed its position.

Washington Blames Canada for the Collapse

US Trade Representative Jamieson Greer offered a different explanation for the breakdown.

According to the US side, Canada had declined to finalize an agreement based on terms that had reportedly been accepted earlier in the week. Washington also accused Ottawa of introducing additional demands and reversing some previous commitments.

The disagreement has therefore shifted the tone of the relationship from optimism earlier in the week to renewed uncertainty over the future of the negotiations.

Tariffs on Steel, Aluminium and Cars Were Key Issues

One proposal under discussion reportedly involved reducing US tariffs on Canadian steel and aluminium from 50% to 25%. Tariffs affecting Canadian vehicles could also have been reduced from 25% to 15%.

In return, Carney had sought action from Canadian provinces to allow US alcoholic beverages back onto store shelves.

The latest dispute adds another chapter to growing trade tensions between the neighboring countries, which intensified after Trump returned to the White House and introduced a broad tariff programme affecting international trade.