Trump Tariffs Hit Canadian Goods After US-Canada Trade Talks Collapse

A last-minute effort by the United States and Canada to reach a trade agreement has failed, triggering new US tariffs on a range of Canadian products and threatening to deepen economic tensions between the two neighbours.

The new duties took effect on Saturday after days of negotiations between Washington and Ottawa ended without a final agreement.

Canadian Prime Minister Mark Carney responded by pledging that Canada would match the US tariffs “dollar for dollar to protect our workers and businesses.”

The new 50 percent US duties affect approximately $20 billion worth of Canadian goods, representing about 5.5 percent of Canada’s exports to the United States. Products affected include hockey sticks, cement and other goods.

US Trade Representative Jamieson Greer confirmed the breakdown in talks, saying: “Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week.”

Greer said the US had offered to reduce tariffs on several Canadian sectors, including steel and aluminum.

No agreement despite late negotiations

The collapse came after intensive discussions that continued into Friday.

President Donald Trump had earlier expressed optimism that an agreement could be reached, saying the United States “should be able to have a deal with Canada” and referring to his “good relationship” with Carney.

However, Canada’s chief negotiator Dominic LeBlanc said after hours of talks that the two sides had yet to resolve their differences.

“We have more work to do,” LeBlanc said.

LeBlanc and Greer had met for about three hours on Thursday, with negotiations continuing into Friday.

Greer said Washington had placed “significant tariff reductions on steel, aluminum, autos and lumber” on the table in return for concessions from Ottawa.

He also criticized Canada’s continued “prolonged retaliation” against American goods and services.

One measure that reportedly angered Washington was Canada’s removal of US alcohol and wine from liquor stores.

Canada says US demands changed

Carney, however, blamed the failure to conclude the agreement partly on changes made by Washington at the last minute.

He said the latest US proposals were “unfair, uneconomic, and called into question the reliability of any deal.”

According to Carney, the two countries had made “important progress” during the negotiations but had not reached an agreement capable of meeting Canada’s objectives.

A senior US official said Ottawa had requested additional concessions that Washington could not offer.

The official said the negotiations remained candid and did not become acrimonious.

Pressure mounts for compromise

The latest escalation is likely to increase pressure on both governments to find a way out of the dispute.

Ryan Majerus, a former US commerce official, warned that Canadian retaliation could make the situation more difficult to resolve.

“If Canada has agreed to also impose retaliatory tariffs, that will make deescalating this a lot harder,” Majerus told AFP.

“But I think both sides will face significant pressure in the coming days to find an off-ramp,” he added.

Christopher Padilla, another former US official now with Brunswick Group, said businesses in both countries had been hoping for an agreement to “turn the page on what has been a very difficult eighteen months in the US-Canada relationship.”

Canada seeks to reduce US dependence

The latest tariffs were initially scheduled to begin on Wednesday, but Trump delayed them for three days after saying negotiations had made significant progress.

Canadian officials had spent the week in Washington trying to finalize a deal covering several areas of disagreement.

Ottawa has been seeking exemptions or relief from US tariffs on automobiles, steel and aluminum, measures that have contributed to economic pressure, job losses and growing strain in the traditionally close relationship between the two countries.

Carney has repeatedly argued that the relationship with Washington has changed permanently, regardless of whether the two governments reach individual trade agreements.

He has called on Canada to diversify its trading relationships and reduce its dependence on the United States, which currently accounts for roughly 70 percent of Canadian exports.

Beyond the latest tariff dispute, the two countries must also negotiate changes to the USMCA, the North American free trade agreement that Trump declined to renew in its current form.

The failure of the latest talks therefore leaves businesses facing renewed uncertainty as Washington and Ottawa prepare for another difficult phase in their trade relationship.

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