Canada Halts U.S. Trade Talks, Recalls Negotiators as 50% Tariffs Hit

Canada has suspended trade negotiations with the United States and recalled its entire negotiating team to Ottawa, following the imposition of new 50% tariffs on billions of dollars worth of Canadian goods. The tariffs took effect Saturday morning after negotiators failed to finalize a comprehensive trade deal by President Donald Trump's extended deadline.

Prime Minister Mark Carney stated that last-minute changes to the U.S. position were "unfair, uneconomic and raised questions about the reliability of any agreement." He explained that recent progress had not been sufficient to meet Canada's objectives, which included maintaining broad access to the U.S. market, reducing tariffs in key sectors, and protecting Canadian businesses.

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Canada was suspending trade negotiations and recalling its negotiating team to Ottawa, arguing that last-minute changes to the U.S. position were unfair, uneconomic and raised questions about the reliability of any agreement.

The U.S. tariffs are being imposed under Section 338 of the U.S. Tariff Act, which allows the president to levy tariffs on any country deemed to be "discriminating" against U.S. commerce. The U.S. Trade Representative's office indicated that the tariffs will affect nearly $20 billion worth of Canadian imports, an amount intended to "offset" the economic impact of what they described as Canada's "unreasonable and discriminatory" measures.

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My statement on Canada-U.S. trade negotiations:

Sources suggest the U.S. was willing to lower, but not eliminate, sectoral tariffs on steel, aluminum, and autos as part of the deal. The proposed agreement also included enhanced partnerships in defense, critical minerals, and energy. Canada, in turn, would have addressed U.S. concerns regarding provincial boycotts of U.S. alcohol, reciprocal tariffs on American autos, and dairy export quotas under supply management.

The imposition of these new tariffs casts uncertainty over the future of the ongoing trade deal negotiations and raises questions about the renegotiation of the Canada-U.S.-Mexico Agreement on free trade (CUSMA).

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The U.S. was prepared to lower, but not remove, sectoral tariffs on steel, aluminum and autos under the deal while withdrawing the new 50 per cent tariff order altogether.