Canada Hits Back With Dollar-for-Dollar Tariffs After US Trade Talks Fail

Canada will impose retaliatory tariffs on a range of American goods, matching the 50% duties recently ordered by US President Donald Trump. Prime Minister Mark Carney announced the move on Saturday, following the collapse of trade talks between the two neighbours.

The "dollar for dollar" tariffs, targeting US steel, electronics, dairy, appliances, agricultural equipment, and pulp and paper, are set to take effect on September 8. The announcement marks a sharp deterioration in relations between the longtime allies and major trading partners.

Negotiations broke down late on Friday after three days of intensive discussions, with each side blaming the other for the failure. The breakdown casts uncertainty over the future of the US-Mexico-Canada free-trade pact.

"Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses," Carney told a press conference. When asked if Canada was engaged in a trade war, he responded, "You're at war when you get attacked. We got attacked."

The new US tariffs cover approximately $20 billion of Canadian exports, affecting sectors including wine, furniture, dairy, cement, clothing, fishing rods, and hockey equipment. These duties do not exempt Canadian products under the three-nation trade deal, which had shielded most Canadian exports over the past 18 months.

US Trade Representative Jamieson Greer called the breakdown "a missed opportunity for Canada to partner with the United States," stating that no new talks were planned. "We're moving forward with measures that respond to Canadian retaliation," Greer told Fox News. "They've always had the best deal, and they still would have an even better deal, but they didn't want that."

Carney said the US administration's last-minute demands halted progress. "In recent days, the U.S. proposed new terms that were uneconomic, unfair, and undermined the net benefits to Canada, calling into question the reliability of any deal," he said, adding that the demands included curtailing Canada's ability to forge new trade deals.

A key sticking point was the treatment of larger vehicles. Canada sought favorable tariff terms for light-duty vehicles to extend to medium- and heavy-duty trucks, a move the US resisted. Carney said the US position would have excluded Canadian-made models, including Ford's F-350, F-450, and F-550 trucks and General Motors' Silverado, making Canadian production less competitive.

Carney said Canada would announce support measures next week for industries hit by the new US duties, adding these measures could last years. The new tariffs cover around 5% of Canada's exports to the US and could expose vulnerable industries such as softwood lumber and wine to severe damage, potentially leading to job losses and business closures.

Ontario Premier Doug Ford supported Carney's decision to retaliate. "I'm glad he didn't sign that deal because it was a bad deal. It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector, and manufacturing sector," Ford told reporters.

Conservative Party leader Pierre Poilievre also voiced support, stating, "Canadians must stand united to defend our country against these unfair attacks on our jobs and businesses."