50% Tariffs Hit Canada as Talks Collapse

Canada vows dollar-for-dollar retaliation starting Sept. 8 after US imposes 50% tariffs.

A fresh wave of 50% US tariffs on Canadian goods took effect just after midnight on Saturday, after trade negotiations between the two countries broke down late Friday night. The duties cover roughly $20 billion worth of Canadian products, according to NBC News, NPR, and other outlets. Prime Minister Mark Carney announced he was suspending trade negotiations and directing Canada's negotiators to return to Ottawa. He called the tariffs a "miscalculation" designed to "hurt and divide us," the BBC reported. Carney said he walked away because he was not prepared to "compromise Canada's sovereignty," adding: "They asked too much and they offered too little."

The collapse marked a dramatic reversal from earlier in the week, when optimism had been running high. NBC News reports that Trump paused the tariffs for three days on Tuesday, writing on social media that the two sides "have a DEAL!" KTEN, citing CNN, similarly notes Trump declared a deal had been reached, subject to finalization of documents. On Thursday, Canadian minister Dominic LeBlanc emerged from a multi-hour meeting with US Trade Representative Jamieson Greer and told reporters the sides were "very close." NBC News reports that negotiators remained at the US trade representative's office past 10:30 PM ET on Friday before talks ultimately faltered.

Both governments accused the other of upending a carefully balanced agreement. Carney said "last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal," as reported by the BBC, NBC News, NPR, and CBC. NBC News reports that Carney specifically cited US efforts to limit tariffs to autos only—excluding medium and heavy-duty trucks—and attempts to restrict Canada's ability to pursue other trade deals and protections of its language, culture, and sovereignty. Greer countered that Canada had made "new demands and walk backs" on previously agreed terms. He told Fox News that no new talks are planned, NBC News and KTEN reported.

The tariffs were imposed under Section 338 of the Tariff Act of 1930, a provision NBC News and KTEN report has never been deployed before. The law allows the White House to apply duties of up to 50% on countries deemed to be discriminating against US commerce. According to CBC, the measures cover more than $28 billion worth of products across close to 500 categories—though NBC News, NPR, and PGurus cite the US trade representative's figure of approximately $20 billion. The tariffs add to existing US duties on Canadian steel, aluminium, automobiles, and lumber. CBC reports that Canada's electronics sector faces the largest exposure, with over $4 billion US in exports affected.

Business groups on both sides of the border warned of serious economic consequences. The Canadian Chamber of Commerce called the tariffs "a body blow to North American competitiveness," NBC News and CBC reported. NBC News also reports that the US Chamber of Commerce warned higher tariffs would "damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs" tied to the North American trade pact. Canadian provincial leaders were divided: Ontario Premier Doug Ford voiced full support for Carney's response, while Alberta Premier Danielle Smith urged restarting negotiations, NBC News reports. CBC reports that US Commerce Secretary Howard Lutnick had expressed dissatisfaction with the proposed deal before the collapse.

Carney announced that Canada will match the US tariffs "dollar for dollar" starting September 8, targeting sectors including steel, dairy, appliances, and electronics, the BBC and NPR reported. NBC News reports that Greer said the US would "respond to Canadian retaliation," though he did not specify how. The collapse also casts a shadow over the USMCA, the trilateral North American trade pact currently under mandatory review. The BBC reports that Carney called the breakdown "certainly not good news" for the agreement. Earlier this summer, Canada and Mexico requested a 16-year renewal of USMCA, but the US declined to renew it in its current form. Carney struck a defiant tone, saying, "Canada has what the world wants. And we will not allow any nation to determine our future."