OTTAWA — Canada and the United States have failed to reach a new trade agreement, with Canadian Prime Minister Mark Carney accusing Washington of demanding excessive concessions while offering insufficient economic benefits.
Carney announced that Canada would impose dollar-for-dollar retaliatory tariffs from September 8 in response to new US tariffs covering approximately $20 billion worth of Canadian goods.
The Canadian measures will target products including steel, dairy, appliances, agricultural equipment, pulp, paper and electronics.
“In recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits for Canada,” Carney said at a news conference in Ottawa. “In short, they asked too much, and they offered too little.”
The collapse followed several days of intense negotiations between Carney, US President Donald Trump and senior trade officials from both countries. Trump had earlier indicated that the two sides had reached a deal, although he said the agreement still required final documentation.
US Trade Representative Jamieson Greer later accused Canada of backing away from commitments and said Washington would proceed with measures in response to Canadian retaliation.
Canada Rejects US Demands
Canada had reportedly offered several concessions during negotiations, including removing some retaliatory measures and allowing US alcohol products to return to Canadian shops.
However, Ottawa said the United States failed to provide acceptable terms for important sectors, particularly the automotive industry.
Carney also rejected the idea of granting Washington exclusive access to Canada’s critical minerals, saying Canada would not surrender control over its strategic resources.
The latest dispute comes after the Trump administration imposed tariffs on several major Canadian industries, including automobiles, steel and aluminum. Canada had previously responded with its own countermeasures.
Risk of a Renewed Trade War
Although the latest US tariffs cover a relatively small portion of bilateral trade, Canadian officials warned that the larger concern is the possibility of another escalation in the trade relationship between the two neighboring economies.
The affected Canadian exports are valued at around $20 billion, representing roughly 5% of the total value of Canadian goods imported into the United States last year.
Carney described the US tariffs as an attempt to pressure and divide Canada, while insisting that his government would support Canadian workers and businesses affected by the measures.
The Canadian government has already provided billions of dollars in economic assistance over the past 18 months and says further measures could follow.
Trump Escalates Rhetoric
Trump responded by criticizing Canada and accusing it of seeking the benefits of its relationship with the United States without accepting the responsibilities that come with it.
US officials have also indicated that Washington could introduce additional measures if Canada proceeds with its planned retaliation.
The standoff highlights the increasingly difficult economic relationship between the two countries since Trump returned to office.
Tariff Powers Face Legal Questions
The Trump administration is also relying on a rarely used provision of US trade law to impose tariffs of up to 50% when Washington determines that foreign countries are discriminating against American commerce.
The legal strategy is expected to face challenges in US courts.
For now, the dispute has spared several major Canadian exports, including energy and critical minerals. However, officials and businesses remain concerned that those products could eventually become targets if tensions continue to escalate.
With negotiations now stalled, Canada and the United States face the prospect of another prolonged trade confrontation that could affect businesses, supply chains and economic relations across North America.
