Crucial trade talks between the United States and Canada to avoid new punishing tariffs by the Trump administration on Canadian goods collapsed Friday night, with Canada saying it would retaliate “dollar for dollar.” Prime Minister Mark Carney of Canada said he had decided to suspend talks because the U.S. side had introduced last-minute terms that were “unfair, uneconomic and called into question the reliability of any agreement.” days, had marked important progress, but ultimately “had not been enough to meet our goals for Canadians.” U.S. Trade Representative Jamieson Greer told reporters that Canada had walked away from the negotiating table, minutes before a deadline that marked the start of new 50 percent tariffs by the Trump administration on a wide range of Canadian goods. a virtual briefing with the press. “New demands and rollbacks of other commitments by Canada have upset the careful balance struck in recent days,” Greer added. Shortly before Greer’s statement to reporters, U.S. Customs and Border Protection sent guidance to importers saying Canadian products the president had identified would face tariffs after 12:01 a.m. In his statement, Carney said Canada would retaliate against the new tariffs, which will affect $20 billion in Canadian exports according to the US administration’s estimates, “to protect our workers and businesses.” In the U.S. market, the tariffs will further fracture the once close relationship between the countries, which has deteriorated sharply since Trump returned to the presidency, targeted Canada with tariffs and repeatedly proposed that it be annexed as the 51st state. Negotiators from both countries have been holed up in the U.S. trade representative’s office in Washington for up to 10 hours a day for several days this week hammering out details of the failed deal. Just hours before the two sides announced that negotiations had been suspended, Trump said he thought a deal could be reached with Canada. On Tuesday he declared that the two nations had reached an agreement in addition to working out some details and had extended an earlier deadline that would have introduced the new tariffs. But Carney made good on his promise to walk away from a deal he didn’t believe was good enough. Polls suggest many Canadians support his decision. A recent Léger poll found that 56 per cent of respondents oppose any additional trade concessions by Canada. He also got early support for his decision to leave the talks from Doug Ford, the premier of Ontario, Canada’s most populous province and home to the country’s important auto industry. “As we fight to protect Canada’s sovereignty and economic security, everything must be on the table. Ontario stands ready to do its part,” Ford said. In addition to fending off the new tariffs, Canada wanted to use the talks to roll back and ideally eliminate tariffs of up to 50 per cent that Trump has imposed on the country’s steel, aluminum and automobiles. Canadian negotiators also hoped to achieve some relief on decades-old softwood lumber tariffs that were raised by additional tariffs from Trump. The U.S. side wanted the eight Canadian provinces that had banned American wine and spirits from their government-owned alcohol distribution systems to end the boycotts, which were implemented last year in response to Trump’s trade attack. He also wanted Canada to remove its retaliatory tariff on American cars and change the way American dairy products are allowed into Canada’s tightly controlled market. In the final days of negotiations, it seemed that Canada had resigned itself to achieving only reduction, not elimination, of current tariffs. 25 percent of 50 percent. But only a limited amount of Canadian steel would be allowed at that reduced rate, and the rest would still face a 50 percent tariff. Under the plan, the people briefed said, cars would fall from 25 per cent to 15 per cent, with the rate adjusted for American parts, which typically account for about half the value of a Canadian-made vehicle. Auto industry executives and analysts said that would continue to leave production in Canada unprofitable and would likely doom assembly plants in the country. While the Supreme Court struck down most of Trump’s tariffs in February, both last year’s tariffs and the new measures against Canada were applied under other trade laws that were not covered by the decision. The legal provision that Trump has used to impose the new 50 percent tariffs on Canada, Section 338, arises from a 1930 law and has never been used before. The tariffs could face legal challenges in the coming weeks. The development was bad news for consumers and businesses on both sides of the border, warned Candace Laing, who heads the Canadian Chamber of Commerce. “This will be a serious blow to North America’s competitiveness in this counterproductive trade saga,” he said. “Americans will see their costs rise and Canadians will see customers, investments and small businesses disappear.”
