Ottawa to match US tariffs dollar for dollar after trade talks collapse

Canada has announced it will impose reciprocal tariffs on United States goods "dollar for dollar" following the breakdown of trade negotiations with its northern neighbour. Prime Minister Mark Carney made the announcement shortly before a Friday night deadline, stating that last-minute changes to the terms proposed by the United States were "unfair, uneconomic, and called into question the reliability of any deal."

The suspension of talks comes after intense negotiations that had been ongoing since July. President Donald Trump had previously threatened to impose a 50 per cent levy on nearly $20 billion (C$28 billion) of Canadian imports by 19 August. Earlier in the week, Trump had temporarily paused these tariffs, suggesting the two sides were close to signing a trade deal that was "very good" for both countries. However, Carney stated that while "important progress" had been made, it was "not enough to meet our objectives for Canadians," leading him to direct negotiators to return to Ottawa.

Consequently, new 50 per cent US tariffs on approximately $20 billion of Canadian imports came into effect at midnight on Saturday. These duties, imposed under the Tariff Act of 1930, apply to a wide range of goods including wine, dairy, cement, clothing, and hockey equipment. They are in addition to existing tariffs the US had already imposed on Canadian steel, aluminium, autos, and lumber.

US Trade Representative Jamieson Greer responded to the breakdown by stating that Canada declined to finalise the deal under terms agreed earlier in the week. Greer claimed that despite a US offer to provide the best treatment of any major exporter to the American market, "new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days."

The collapse of talks marks a significant shift in tone from earlier in the week, when both US and Canadian officials appeared optimistic about reaching an agreement. Negotiators had reportedly been discussing a framework to reduce US tariffs on Canadian steel and aluminium from 50 per cent to 25 per cent, and on Canadian autos from 25 per cent to 15 per cent. In exchange for these reductions, Carney had asked Canadian provinces to restore US alcohol to store shelves, a measure previously banned in retaliation to earlier US tariffs.

Ontario Premier Doug Ford expressed full support for the Prime Minister's decision, describing it as a "strong response—tariff for tariff, dollar for dollar." The dispute has been simmering since Trump returned to office in January last year, upending decades of free trade between the two nations. While the US Chamber of Commerce warned that higher tariffs would damage both economies and risk 13 million American jobs, Greer indicated the US is "not going to tolerate" counter-tariffs, suggesting further action may follow.