Canada Matches US Tariffs "Dollar for Dollar" as Trade Talks Collapse

Canadian Prime Minister Mark Carney attends a hydro agreement announcement
Image source: Reuters

A fresh wave of US tariffs has taken effect as of midnight Saturday after a last‑minute breakdown in trade talks. Prime Minister Mark Carney announced the suspension of negotiations and pledged to impose reciprocal tariffs on US goods "dollar for dollar".

Carney described the US proposed terms as "unfair, uneconomic" and said they called into question the reliability of any deal. The decision follows weeks of intense negotiations that began after President Donald Trump threatened a 50% levy on nearly $20 bn (C$28 bn) of Canadian imports by 19 August.

Earlier in the week Trump had temporarily paused those tariffs, claiming the two sides were close to a "very good" trade deal for both countries. However, minutes before the deadline Carney said progress had been "not enough to meet our objectives for Canadians" and therefore suspended the talks.

The U.S. trade representative Jamieson Greer said Canada had declined to finalize the deal under earlier terms, and that new US demands and withdrawal of commitments had upset the balance achieved. The U.S. warned it would not tolerate counter‑tariffs and signalled that it may take action.

The breakdown marks a significant shift from earlier optimism that a trade deal would benefit both nations. Negotiators had discussed reducing U.S. tariffs on Canadian steel, aluminium and autos, but Carney also requested that Canadian provinces restore U.S. alcohol to store shelves.

Canada now faces new 50% U.S. tariffs under the 1930 Tariff Act, applying to wine, dairy, cement, clothing and hockey equipment, on top of existing tariffs on steel, aluminium, autos and lumber. Doug Ford, premier of Ontario, pledged full support for a "tariff for tariff, dollar for dollar" response.

Businesses on both sides of the border warned the new U.S. tariffs will be damaging. The U.S. Chamber of Commerce warned higher tariffs would hurt both economies, increase costs for American families and risk 13 million U.S. jobs under the US‑Mexico‑Canada Trade Agreement. A poll by Abacus Data found around 36% of Canadians would support retaliating, while 30% would favour continued negotiation.