The United States is moving ahead with 50% tariffs on certain Canadian goods after Washington and Ottawa failed to finalize a trade agreement, with both governments accusing the other of making last-minute changes and Canada pledging dollar-for-dollar retaliation.
By yourNEWS Media Newsroom
A new round of 50% U.S. tariffs on certain Canadian goods is taking effect after negotiations between Washington and Ottawa collapsed despite a three-day extension ordered by President Donald Trump to give the two governments more time to reach an agreement.
U.S. Trade Representative Jamieson Greer said Canada backed away from commitments that American officials believed had already been settled earlier in the week, resulting in the new 50% tariff measures.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” Greer said in a statement.
“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.”
The tariffs had originally been scheduled to take effect Friday, but Trump temporarily delayed their implementation for three days in an effort to allow negotiators to resolve the remaining disagreements.
Those negotiations ultimately failed.
The dispute traces back to trade tensions that intensified in July over several Canadian policies, including changes to the country’s dairy supply-management system, regional restrictions on sales of U.S. alcohol and retaliatory Canadian tariffs on automobiles.
Canada has removed some of its retaliatory tariffs but has continued imposing tariffs on cars, steel and aluminum.
Ottawa maintains that U.S. tariffs covering those products violate the U.S.-Mexico-Canada Agreement, or USMCA.
The agreement discussed during the latest negotiations would have provided Canada with what Greer described as “significant tariff reductions” on steel, aluminum, lumber and automobiles.
According to Greer, the proposed arrangement would have extended well beyond tariff reductions and incorporated cooperation between the neighboring countries in several strategically important industries.
“The offer would have led to supply chain coordination on aerospace, complementary actions to address unfair trade practices, critical minerals cooperation, increased enforcement against imports produced with forced labor, and the announcement of formal USMCA negotiations.”
Canadian Prime Minister Mark Carney offered a sharply different account of why the discussions broke down.
Carney said he pulled Canadian negotiators from the talks after concluding that Washington had altered the proposed agreement at the last minute.
He said the negotiations ended when it became clear “last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
Carney also vowed that Canada would respond to the U.S. measures by matching the tariffs “dollar for dollar.”
The prime minister portrayed the breakdown as evidence of a lasting change in Canada’s relationship with its largest trading partner.
Carney said his government now recognizes that “America has changed” and that there will not be a “return to our old relationship.”
The escalation threatens to deepen a trade confrontation involving some of the most highly integrated sectors of the U.S. and Canadian economies, particularly automobiles, metals, lumber, aerospace and critical minerals.
Washington maintains that its proposed agreement would have offered Canada more favorable treatment than other major exporters while establishing closer cooperation on supply chains and trade enforcement.
Ottawa, however, rejected the final terms and is preparing retaliatory measures rather than accepting the agreement.
The dispute is unfolding as both governments move toward formal negotiations over the future of the USMCA, the trade pact linking the United States, Canada and Mexico.
The failed negotiations and ensuing tariff escalation also drew attention on X as the two countries prepared for another round of retaliatory trade measures.
With no agreement in place, the United States is proceeding with the 50% tariffs while Canada prepares a matching response, leaving the two longtime trading partners entering a more confrontational phase of their economic relationship.
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