Canada will impose dollar-for-dollar tariffs on selected US goods from Sept 8, Prime Minister Mark Carney said on Saturday, after trade talks with Washington collapsed, further worsening relations between the two longtime trading partners.
The retaliatory measures will target US steel, electronics, dairy products, appliances, agricultural equipment, pulp and paper, as well as some goods previously covered by Canadian tariffs.
The move follows the failure of three days of intensive negotiations, with both sides blaming each other for derailing efforts to reach a deal. The breakdown has also cast fresh uncertainty over the future of the US-Mexico-Canada free trade agreement.
US President Donald Trump’s latest 50% tariffs cover about US$20 billion of Canadian exports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment. Unlike some previous measures, the new duties do not exempt Canadian goods covered by the three-nation trade agreement.
Carney said Canada could not accept the terms proposed by Washington and would match the new tariffs “dollar for dollar” to protect Canadian workers, farmers, families and businesses.
According to Reuters, Carney said last-minute US demands had stalled negotiations, including proposals he described as uneconomic and unfair and which would have restricted Canada’s ability to pursue new trade agreements.
Washington, however, gave a different account of the breakdown. US Trade Representative Jamieson Greer called it a “missed opportunity” and said the United States would proceed with measures in response to Canada’s retaliation.
The dispute could put further pressure on Canadian industries, with the new US tariffs affecting about 5% of Canada’s exports to the US. Trade experts have warned that vulnerable sectors such as softwood lumber and wine could face significant losses, including job cuts and business closures.
Carney said the Canadian government would announce support measures next week for industries affected by the tariffs, with assistance potentially extending for several years.
A key sticking point in the negotiations was the treatment of larger vehicles, with Canada seeking favourable tariff terms for light-duty vehicles to be extended to medium- and heavy-duty trucks. Carney said the US position would have disadvantaged Canadian-made models.
With nearly 70% of Canada’s exports going to the US, the escalating dispute poses a significant challenge to the Canadian economy and further strains ties between the two countries.
