Canada Hits Back With Tariffs as Trump Trade War Escalates

Canada is striking back at the United States with new tariffs after trade negotiations between the two countries collapsed, deepening an already serious dispute between the neighbouring allies.

Prime Minister Mark Carney announced the retaliatory measures on Saturday, a day after walking away from what he called unacceptable US trade demands.

The failed talks have triggered new 50-percent US tariffs on roughly $20 billion worth of Canadian products, representing about 5.5 percent of Canada’s exports to the United States. Products affected include everything from hockey sticks to cement.

“You’re at war when you get attacked. We got attacked,” Carney said.

The Canadian response will include tariffs targeting US steel and dairy products and will come into effect on September 8. Carney said additional details would be released next week.

Trump responded sharply on Sunday, writing on Truth Social: “Canada wants the benefits of being a State, without being one!!!”

He added: “They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!”

The latest escalation came despite Trump previously saying that the US “should be able to have a deal with Canada,” while pointing to his “good relationship” with Carney.

Carney Rejects US Demands

Carney said negotiations had initially shown promise but deteriorated after Washington presented new terms that Ottawa could not accept.

“In recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,” Carney said.

“We cannot accept what they’ve offered, and we will not give what they’ve asked.”

US Trade Representative Jamieson Greer offered a different account, saying Washington had proposed reducing tariffs on Canadian steel, aluminum and automobiles and eliminating a recently imposed tariff on Canadian lumber.

Greer said the package would have provided Canada “the most preferential treatment of any trading partner,” according to the New York Times.

But speaking to Fox News, Greer said Washington was “moving forward with measures that respond to Canadian retaliation” and indicated that no further talks with Canadian negotiators were planned.

Economic Fallout Grows

The trade dispute is placing additional pressure on Canada, which has been seeking exemptions from US tariffs affecting its auto, steel and aluminum sectors.

The measures have contributed to economic disruption, job losses and increasing strain on a relationship that was once considered exceptionally close.

Washington has accused Canada of imposing “discriminatory treatment” on US alcohol, automobile and dairy products.

Carney said one reason for the collapse of negotiations was a last-minute US demand that would have placed restrictions on Canada’s trade agreements with other countries.

He also said US negotiators made unacceptable “threats” concerning the French language and “Quebec culture.”

The latest escalation has angered Democratic lawmakers and governors in US border states.

New York Governor Kathy Hochul criticised the Trump administration, writing on X: “Needlessly picking fights with our allies and raising prices here at home. That’s Trump’s economic policy in a nutshell.”

Canada Looks Beyond US

The dispute comes as the two countries face the broader challenge of renegotiating the North American free trade agreement, USMCA, after Trump declined to renew it in its current form.

Trump’s repeated comments about making Canada the 51st US state have further antagonised Canadians.

Carney has repeatedly argued that Canada must reduce its dependence on its southern neighbour, which currently accounts for about 70 percent of Canadian exports.

“We’ve been under no illusions. We recognized from the start that America has changed,” Carney said.

“We recognize that sometimes, its signature was written in pencil.”

Ontario Premier Doug Ford also warned Canadians about the US president, saying Trump “can’t be trusted, simple as that.”

“President Trump is the type of person who would steal your lunch money,” Ford said.

The Business Roundtable, which represents about 200 chief executives of major US companies, meanwhile warned that the new tariffs “risk raising costs for American businesses and families” and urged Ottawa and Washington to return to the negotiating table.

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