Intense negotiations to stave off new
levies by the Trump administration ended in an impasse as Mark Carney suspended
talks. U.S. tariffs on Canada, and retaliatory tariffs on the U.S., will come
into effect.
·
Trade
talks collapse: Crucial US-Canada negotiations broke down
after weeks of talks aimed at avoiding new 50%
US tariffs on Canadian goods.
·
Canada
suspends talks: Prime Minister Mark
Carney said Canada walked away because
last-minute US terms were “unfair” and “uneconomic.”
·
US
position: USTR Jamieson
Greer said Canada had declined to finalize a
deal and accused Ottawa of making new demands and reversing commitments.
·
50%
tariffs: New US tariffs of 50%
on a broad range of Canadian goods were
set to take effect after 12:01 a.m.,
according to CBP guidance.
·
Canadian
retaliation: Carney said Canada would respond with “dollar-for-dollar”
retaliation to protect Canadian workers and
businesses.
·
Trade
affected: The new US tariffs are estimated to cover
around $20 billion of Canadian exports.
·
Key
sectors: Negotiations focused heavily on automobiles,
steel, aluminum and lumber.
·
US
demands: Washington sought concessions including:
o Ending Canadian restrictions on US
wine and spirits in provincial government-run distribution
systems.
o Removal of Canada's retaliatory tariffs on
US automobiles.
o Greater access for US
dairy products into Canada's protected dairy market.
·
Canadian
demands: Canada sought reductions or elimination
of existing US tariffs of up to 50%
on steel, aluminum and autos,
along with relief from longstanding softwood
lumber tariffs.
·
Proposed
compromise: US proposals reportedly included reducing
steel and aluminum
tariffs from 50% to 25%, but only for limited
Canadian quantities.
·
Auto
tariffs: Proposed US auto tariffs would fall from 25%
to 15%, with adjustments based on the share of
US-made parts in Canadian vehicles.
·
Canadian
auto industry: Industry executives warned that even a 15%
tariff could make Canadian vehicle production unprofitable and
threaten assembly plants.
·
Political
backing: Ontario Premier Doug
Ford supported Carney's decision, stressing
the need to protect Canadian sovereignty and economic security.
·
Canadian
public opinion: A recent Léger poll found 56%
of Canadians opposed further trade concessions to
the US.
·
Trump's
earlier optimism: President Trump had said just hours
earlier that a deal could still be reached, after the two countries reportedly
agreed on most issues.
·
Legal
uncertainty: The new tariffs rely on Section
338 of the 1930 Tariff Act, a provision that has
never previously been used for this purpose and could face legal challenges.
·
Broader
impact: The collapse threatens to further damage
the historically close US-Canada economic relationship and raise costs
for consumers and businesses on both sides of the border.
·
Business
warning: Canadian Chamber of Commerce President Candace
Laing warned that the tariffs could weaken North
American competitiveness, investment, businesses and consumer demand.
[ABS News Service/22.08.2026]
Crucial
trade talks between the United States and Canada to stave off punishing new tariffs
by the Trump administration on Canadian goods collapsed late Friday, with Canada
saying it would retaliate “dollar for dollar.”
Prime
Minister Mark Carney of Canada said he had decided to suspend the talks because
the American side had introduced last-minute terms that were “unfair, uneconomic,
and called into question the reliability of any deal.”
He
added that the talks, which had been going on for weeks and had intensified in the
past few days, had marked important progress but had ultimately “not been enough
to meet our objectives for Canadians.”
United
States Trade Representative Jamieson Greer told reporters that Canada had walked
away from the negotiating table, minutes before a deadline ushering in new 50 percent
tariffs by the Trump administration on a broad range of Canadian goods.
“Tonight,
Canada declined to finalize the trade deal under the terms agreed earlier this week,
despite the U.S. offer to Canada to receive the best treatment of any major exporter
to our market,” Mr. Greer said on a virtual briefing with the press.
“New
demands and walk backs of other commitments by Canada have upended the careful balance
reached in the past days,” Mr. Greer added.
Shortly
before Mr. Greer’s statement to the press, U.S. Customs and Border Protection sent
out guidance for importers saying that the Canadian products that the president
had identified would face tariffs after 12:01 a.m.
Speaking
to reporters, a U.S. official said that Canada wanted concessions that the United
States wasn’t prepared to give, particularly when it came to the automotive sector,
as well as trade in steel, aluminum and lumber.
If
Canada does retaliate, the official said, Mr. Trump would be provided with options
“to level out the playing field once again.”
In
his statement, Mr. Carney said Canada would retaliate against the new tariffs, which
will affect $20 billion in Canadian exports by the U.S. administration’s calculations,
“to protect our workers and businesses.”
In
addition to making hundreds of Canadian products like cheese and hockey sticks price-prohibitive
in the U.S. market, the tariffs will further fracture the once-close relationship
between the countries, which has drastically deteriorated since Mr. Trump returned
to office, targeted Canada with tariffs and repeatedly proposed that it be annexed
as the 51st state.
Negotiators
from both countries have been cooped up in the United States trade representative’s
office in Washington for up to 10 hours a day for several days this week hammering
out the details of the failed agreement.
Just
hours before the two sides announced negotiations had been suspended, Mr. Trump
said he thought a deal could be reached with Canada. On Tuesday he declared that
the two nations had reached a deal aside from working out some details and had extended
an earlier deadline that would have introduced the new tariffs.
But
Mr. Carney made good on his promise to walk away from a deal he didn’t think was
good enough. Polling suggests that many Canadians support his decision. A recent
Léger poll found that 56 percent of respondents are opposed to any further trade
concessions from Canada.
He
also got an early endorsement for his decision to walk away from talks from Doug
Ford, the premier of Ontario, Canada’s most populous province and home to the country’s
important auto industry. “As we fight to protect Canadian sovereignty and economic
security, everything needs to be on the table. Ontario is ready to do its part,”
Mr. Ford said.
In
addition to fending off the new tariffs, Canada wanted to use the talks to roll
back and ideally eliminate tariffs of up to 50 percent that Mr. Trump has imposed
on the country’s steel, aluminum and autos. Canadian negotiators
also hoped to achieve some relief on softwood lumber tariffs that go back decades
and were augmented with additional tariffs from Mr. Trump.
The
U.S. side wanted the eight Canadian provinces that had barred American wine and
spirits from their government-owned alcohol distribution systems to end the boycotts,
which were brought in last year in response to Mr. Trump’s trade attack. It also
wanted Canada to drop its retaliatory tariff on American cars and to change how
American dairy products are allowed into Canada’s tightly controlled market.
In
the final days of negotiations, it appeared that Canada had become resigned to only
succeeding in reducing, not eliminating, the current tariffs.
Leading
into Friday’s talks, several people in both countries briefed on the negotiations
described U.S. proposals that still maintained substantial, if lower, tariffs on
the two metals and autos.
They
said that the plan would cut steel and aluminum tariffs
to 25 percent from 50 percent. But only a limited quantity of Canadian steel would
be allowed at that reduced rate, with the balance still facing a 50 percent tariff.
Under
the plan, the people briefed said, autos would fall to 15 percent from 25 percent,
with the rate being adjusted for American parts, which typically make up about half
the value of a vehicle made in Canada. Executives and analysts in the auto industry
said that would still leave production in Canada unprofitable and likely doom assembly
plants in the country.
While
the Supreme Court struck down most of Mr. Trump’s tariffs in February, both last
year’s tariffs and the new measures against Canada were brought under other trade
laws that were not covered by the decision.
The
legal provision that Mr. Trump has used to impose the new 50 percent tariffs on
Canada, Section 338, stems from a 1930 law and has never been used before. The tariffs
could face legal challenges in the coming weeks.
The
development was bad news for consumers and businesses on both sides of the border,
warned Candace Laing, who leads the Canadian Chamber of Commerce.
“This
will be a body blow to North American competitiveness in this self-defeating trade
saga,” she said. “Americans will see their costs go up, and Canadians will see customers,
investment and small businesses disappear.”