Tensions between longtime allies Canada and the United States intensified on Friday (US time) as crucial trade talks between the two sides collapsed. The major new development triggered the punishing 50% tariffs the Trump administration sought to hit Canadian goods with, while Canada’s Prime Minister Mark Carney hoped to avert them with a last-minute deal.
After days-long conversations to seal a deal, US Trade Representative Jamieson Greer blamed Canada for failing to finalise a deal that could have helped them avoid 50% tariffs on more Canadian goods. The shocking reversal comes days after US President Donald Trump temporarily halted the hefty duties against the neighbouring country, signalling via social media that both sides were extremely close to a deal.
As the US intends to now impose 50% tariffs on roughly $28 billion of Canadian goods at midnight on Saturday (local time), Canadian Prime Minister Mark Carney’s office has expressed his government’s intentions of matching “those tariffs dollar for dollar” to ensure safeguards for its own workers and businesses.
Where does the US stand?
“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalisation of documents, have a DEAL!” Trump posted on Truth Social just hours before the tariffs were initially set to take effect earlier this week.
Speaking to reporters on Friday, Jamieson Greer, however, shed light on a new reality: “Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week, despite the US offer to Canada to receive the best treatment of any major exporter to our market.”
He further held Canada responsible for upending the “careful balance” both sides had reached in the last few days by presenting new demands and walking back on other commitments.
Before Greer publicly spoke out against Canada, the US Customs and Border Protection issued official guidance for importers, informing them that tariff-prone Canadian products, as identified by Trump, would face the punitive duties after 12:01 am. The new 50% US tariffs were imposed by the POTUS using a Depression-era law called the Tariff Act of 1930. Canada is already subject to existing tariffs imposed on steel and aluminum, autos and lumber.
Canadian PM Mark Carney vows to hit back with retaliatory tariffs
Mark Carney, the prime minister of Canada, contradicted Greer’s remarks, insisting that the agreement fell apart only because the US brought up last-minute terms that were “unfair, uneconomic, and called into question the reliability of any deal.”
Issuing an official statement in light of the US-Canada trade negotiations now being at a standstill, PM Carney’s office asserted that their new government has focussed on diversifying their partnership abroad and striking a fair deal with the US. Hitting back at US President Donald Trump’s sweeping tariff regime, the Prime Minister of Canada proclaimed that their government has long understood that the US is “altering all its trade relationships” by imposing “tariffs on its closest allies and charging for access to its vast market.”
The Canadian PM’s statement also emphasised that the government will introduce additional measures to support workers and businesses in the coming days after having already invested nearly $25 billion to back them over the past 18 months.
America and Canada’s initial discussions revolved around potentially lowering tariffs on certain Canadian steel and aluminum to 25% and slashing duties on Canadian autos to 15%. Canada, in turn, had plans to eliminate retaliatory measures implemented last year after Trump initiated the tariff war. The US was counting on Carney removing tariffs on American vehicles, with the White House even asking the ban on US alcohol sales to be lifted.