Carney Calls US Tariffs a Miscalculation as Canada-US Trade Talks Collapse
Canadian Prime Minister Mark Carney has described a fresh wave of United States tariffs on Canada as a "miscalculation" designed to "hurt and divide us," following the collapse of bilateral trade talks late on Friday. Speaking to Canadians on Saturday morning, Carney stated that the country is now in a trade "war" after being hit with punishing new US duties.
"They asked too much and they offered too little," Carney said, confirming that Canada will match the US tariffs "dollar-for-dollar" starting on 8 September. The retaliatory measures will include levies on steel, dairy, appliances, and electronics. The breakdown of negotiations upends a deeply integrated trading relationship between the two allied nations, with no clear path to a resolution. US President Donald Trump has not yet commented on the development.
Collapse of Negotiations and New Tariffs
Both nations had expressed optimism about reaching an agreement earlier in the week. However, negotiations fell apart after each side accused the other of introducing last-minute changes. Following the breakdown, Canada was hit with new 50% US tariffs on a range of Canadian goods, which come in addition to existing US tariffs on Canadian steel, aluminium, automobiles, and lumber.
The newly imposed US tariffs are limited in scope, covering approximately $20bn (£15bn; C$28bn) of Canadian imports, representing about 5% of the total. The affected goods include wine, dairy, cement, clothing, and hockey equipment. Carney stated that Canada is retaliating "reluctantly" to protect its national interests, adding that specific details of the counter-measures will be released in the coming days.
US negotiators accused Canada of making "new demands and walk backs" on previously agreed terms. On Saturday, US Trade Representative Jamieson Greer told Fox News that there are currently no plans to resume talks. Greer added that the US had been prepared to reduce some of its tariffs on Canada as part of the proposed deal.
Disputed Terms and Political Reaction
Carney rejected the US assertion that Canada had made last-minute requests, stating, "We clarified what was on offer and were continually disappointed by the answers." He explained that the US had presented "unacceptable" and "uneconomic" terms, including restrictions on Canada's ability to secure new trade agreements with other nations.
Canadian political leaders across federal and provincial lines have voiced support for the prime minister's stance. Conservative opposition leader Pierre Poilievre supported Carney, calling the new US levies "unjustified." Doug Ford, the premier of Ontario, Canada's most populous province, backed Carney and remarked that Trump "can't be trusted."
British Columbia Premier David Eby stated that the US demand to restrict Canada's trade-negotiating abilities "would reduce us to the economic equivalent of the 51st state," adding that such terms were "never acceptable to Canadians." Quebec Premier Christine Fréchette warned of potential job losses, stating that "behind these numbers are real people," and promised measures to support affected sectors. Meanwhile, Alberta Premier Danielle Smith urged both sides to return to the negotiating table.
Broader Trade Implications
The collapse follows more than a year of intermittent trade negotiations, which intensified recently ahead of a US-imposed deadline. The two countries, alongside Mexico, have also been engaged in a mandatory review of the United States-Mexico-Canada Agreement (USMCA). The trilateral pact, signed during Trump's first term to replace the 1994 North American Free Trade Agreement, underpins $1.6tn (£1.2tn) in annual trade.
Earlier this summer, Canada and Mexico formally requested a 16-year renewal of the USMCA, but the US declined to renew the pact in its current form. When asked how the collapse of Friday's bilateral talks would affect the broader North American free trade agreement, Carney remarked that it was "certainly not good news."
