The latest round of U.S. tariffs on billions of dollars worth of Canadian goods took effect just after midnight Saturday after Canada and the United States failed to reach a last-minute trade agreement.
Prime Minister Mark Carney said Canada will respond with dollar-for-dollar retaliatory tariffs after the White House imposed new 50 per cent duties on hundreds of Canadian products. He said negotiators came close to a deal, but Ottawa rejected the final U.S. terms.
“I have decided to suspend trade negotiations with the U.S.,” Carney said in a statement, adding that last-minute changes made by the United States were unfair and undermined confidence in any agreement.
U.S. President Donald Trump did not immediately comment on the collapse of the talks.
U.S. Trade Representative Jamieson Greer blamed Canada for the breakdown, saying Ottawa walked away from a deal that would have given Canada the most favourable treatment of any major exporter to the U.S. market. He also criticized Canada for maintaining retaliatory measures, including restrictions on some American goods and services.
The collapse marks a major escalation in the trade dispute between the two countries after weeks of negotiations in Washington. Canadian Trade Minister Dominic LeBlanc had met repeatedly with Greer in an effort to secure a deal before Friday’s deadline.
Although the proposed agreement was never released publicly, sources said it would have reduced tariffs on Canadian steel, aluminum and automobiles. In exchange, provinces were asked to consider lifting bans on American alcohol sales.
Businesses brace for impact
The Canadian Chamber of Commerce warned the new tariffs will damage businesses on both sides of the border.
“This will be a body blow to North American competitiveness,” the organization said, arguing that 50 per cent tariffs are too large for most companies to absorb.
The new U.S. duties apply to more than $28 billion US worth of Canadian exports, including plywood, cement, wine, plastics and sporting goods such as hockey sticks.
The Trump administration said the tariffs are a response to Canada’s retaliatory trade measures and what it describes as unfair treatment of U.S. dairy, alcohol and automotive industries.
Electronics and B.C. among hardest hit
Canada’s electronics industry faces the largest financial impact, with more than $4 billion US in exports now subject to the new tariffs. Electrical boards and controllers are among the highest-value products affected.
The plastics sector is also expected to suffer significant losses, with about $3 billion US in exports—including bottles, flooring and household products—caught by the new duties.
British Columbia is projected to be the most affected province, as wood and paper products account for more than 13 per cent of its exports to the United States. Quebec also faces major losses, with roughly 10 per cent of its exports exposed, adding pressure to industries already facing existing 50 per cent tariffs on steel and aluminum.
