A new round of US tariffs on a broad range of Canadian goods took effect on Saturday after last-minute trade negotiations between Washington and Ottawa broke down.
Canadian Prime Minister Mark Carney announced the suspension of talks shortly before the deadline and said Canada would respond with matching tariffs on US products.
“Canada will match those tariffs dollar for dollar,” Carney said, arguing that last-minute changes to Washington’s proposed terms were unfair and economically damaging and raised doubts about the reliability of a potential agreement.
The negotiations had continued since July after US President Donald Trump threatened to impose 50% tariffs on almost $20 billion worth of Canadian imports. Trump temporarily delayed the measures earlier in the week, saying the two countries were close to reaching what he described as a very good trade agreement.
Carney said negotiators had made important progress but had failed to reach the objectives set by Canada.
US Trade Representative Jamieson Greer gave a different account of the collapse. He said Canada had refused to finalise an agreement based on terms discussed earlier in the week and accused Ottawa of making new demands while reversing previous commitments.
The breakdown represented a sharp change from earlier optimism on both sides of the border.
Negotiators had reportedly been considering reducing US tariffs on Canadian steel and aluminium from 50% to 25%, while duties on Canadian automobiles could have fallen from 25% to 15%.
In return, Carney had sought commitments from Canadian provinces to restore US alcohol products to store shelves.
The new US tariffs, imposed under the Tariff Act of 1930, cover products including wine, dairy goods, cement, clothing and hockey equipment. They come on top of existing US duties on Canadian steel, aluminium, automobiles and lumber.
The dispute has strained relations between the two countries since Trump returned to office and launched a broad tariff programme affecting major trading partners.
Canada has been seeking reductions in tariffs on key industries, while Washington has demanded several concessions. These include greater access for US dairy products, the removal of Canadian retaliatory tariffs on American vehicles and an end to provincial restrictions on US alcohol.
Ontario Premier Doug Ford backed Carney’s response, calling for a strong Canadian reaction based on matching US tariffs.
Businesses on both sides have warned that escalating tariffs could increase costs, disrupt supply chains and threaten jobs. The US Chamber of Commerce has said higher duties could harm both economies and put millions of American jobs connected to trade at risk.
Public opinion in Canada remains divided. A recent Abacus Data poll found that 36% of Canadians supported retaliatory tariffs, while 30% preferred continued negotiations.
Greer has warned that Washington would respond if Canada imposes counter-tariffs, raising the prospect of another escalation between two countries whose economies remain closely connected.
