What killed the US-Canada trade deal? Trucks, culture, and a late-night collapse

Canadian Prime Minister Mark Carney said on Saturday that Canada will impose new tariffs on US goods from September 8. The tariffs will cover US steel, dairy products, appliances, agricultural equipment, pulp and paper, electronics and some other products.

Canada’s move comes after Trump imposed new 50% tariffs on several Canadian goods from midnight. The tariffs cover around $20 billion worth of Canadian exports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment. 

Canada says it will match US tariffs 

Carney said Canada would respond to the new US tariffs dollar for dollar.

“Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses,” he said at a press conference in Ottawa.

Canada’s new tariffs will cover US steel, dairy products, appliances, agricultural equipment, pulp and paper, electronics and some other goods. The government will announce more details in the coming days. 

Asked whether Canada was now in a trade war with the US, Carney said: “You’re at war when you get attacked. We got attacked.”

He also made it clear that Canada was not willing to accept the US offer from the final round of talks.”We cannot accept what they have offered, and we will not give what they have asked,” Carney said.

Why the US-Canada talks fell apart 

The two countries had appeared close to a deal just days ago after a week of intense negotiations.

Trump had first announced the 50% tariffs in July. They were originally due to start on August 19, but Trump delayed them until August 22 after saying the two countries had reached an agreement “subject to the finalisation of documents.”

That agreement soon fell apart. 

Speaking to the New York Times, US Trade Representative Jamieson Greer said Washington had offered Canada a series of major tariff cuts. The US was prepared to reduce its 50% steel tariff to 25% for most Canadian steel imports under a quota system.

For aluminium, the US had offered to cut the tariff from 50% to 25% without a quota. Washington also offered to reduce its 25% tariff on Canadian cars. Greer said the rate could have fallen as low as 7% for vehicles with enough US content.

The US also offered to remove its 10% tariff on Canadian softwood lumber, which Trump had imposed last year.

Greer said Washington was also ready to suspend the new 50% tariffs on Canadian dairy products, wine, hockey sticks and other goods. “Obviously, we would completely suspend the 50% Section 338 tariffs that we were going to apply to 5% of Canadian exports,” he said.

‘We cannot accept what they offered’

Carney gave a very different picture of the negotiations.

He said Canada had been ready to make several concessions. Ottawa had agreed to remove its retaliatory tariffs on US steel, aluminium and cars. It was also prepared to ask Canadian provinces to restore sales of US liquor, which many provinces have banned.

But Canada wanted more in return. One of the biggest problems was over larger vehicles and the US did not agree.

Carney said the US position would have left Canadian-made trucks such as Ford’s F-350, F-450 and F-550 and General Motors’ Silverado at a disadvantage.

Canada also wanted more tariff exemptions for cars made with US and Canadian parts.

Carney said there were other US demands that went beyond normal trade issues. He said some proposals could affect Canadian culture, the French language and the country’s sovereignty.

He also said Washington wanted Canada to remove tariffs on goods from countries outside the US, without offering enough in return.

Carney did not give details of all the proposals. “We cannot accept what they offered and we will not give what they asked,” he said. Greer rejected that assessment. “These are modifications that would continue their best access and improve it,” he told the NYT.

No new talks planned 

For now, there are no new US-Canada trade talks on the calendar.

Speaking to Fox News on Saturday, Greer said the US was moving ahead with measures in response to Canada’s retaliation.

“We’re moving forward with measures that respond to Canadian retaliation,” he said. “They’ve always had the best deal, and they still would have an even better deal, but they didn’t want that.”

Businesses brace for impact 

The new US tariffs cover about 5% of Canada’s total exports to the US. While that may appear relatively small, trade experts warn that the impact could be severe for industries that depend heavily on the American market. 

Softwood lumber and wine are among the sectors that could face serious damage. Some businesses could be forced to cut jobs or even close if the tariffs remain in place for a long time.

Speaking to Reuters, Candace Laing, CEO of the Canadian Chamber of Commerce, said businesses across the country were preparing for a difficult period.

“We will be mobilising our network of businesses in all regions and all sectors to brace for impact and make the best of a bad situation,” she said.

Carney said Canada would announce support measures next week for industries hit by the new US tariffs. He said some of that help could continue for years. 

Canadian leaders back Carney

Carney’s decision to reject the US deal has received support from several Canadian political leaders. Ontario Premier Doug Ford, one of the strongest critics of Trump’s tariffs, said he was happy Carney had refused to sign the agreement.

“I’m glad he didn’t sign that deal because it was a bad deal. It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector, and the manufacturing sector,” Ford told reporters.

Conservative opposition leader Pierre Poilievre also called on Canadians to stand together.

“Canadians must stand united to defend our country against these unfair attacks on our jobs and businesses,” he said. Carney was elected last year after promising to take a tough approach in negotiations with Trump. 

Canada looks beyond the US 

Canada faces a tough situation as nearly 70% of its exports go to the US, making it heavily dependent on the American market. Despite this, PM Mark Carney wants to build stronger trade and military ties with other countries.

The collapse of talks has also put the future of the USMCA trade pact under pressure. The deal has protected most Canadian exports from US tariffs for the past 18 months. But with both sides now imposing fresh tariffs, that protection is facing a new challenge.