Canada-US trade war reignites as talks fail at last minute

Trade talks between Canada and the United States collapsed Friday night, plunging the North American trade relationship back into a state of war. Ottawa has vowed to retaliate with matching tariffs on U.S. goods.

Despite hopeful signals earlier in the week, including President Trump's assertion that a deal was imminent, negotiations faltered. Canadian Prime Minister Mark Carney announced the suspension of talks, citing an inability to reach an agreement that met Canada's objectives. "As a result, this evening, I have decided to suspend trade negotiations with the US and have directed Canada’s negotiators to return to Ottawa," Carney stated.

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As a result, this evening, I have decided to suspend trade negotiations with the US and have directed Canada’s negotiators to return to Ottawa.

With the midnight deadline passing, 50% tariffs on $20 billion of Canadian goods have now taken effect. "Canada will match those tariffs dollar for dollar to protect our workers and businesses," Carney added. The U.S. Trade Representative's office, however, blamed Canada for the breakdown, alleging "new demands and walk backs of other commitments" that disrupted a "careful balance."

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Canada will match those tariffs dollar for dollar to protect our workers and businesses.

This latest confrontation marks a significant escalation in a trade relationship that has been deteriorating since Trump's return to office. Previous tariffs on autos, steel, and aluminum, along with Canadian retaliatory measures, had already strained ties. While some countermeasures were rolled back, lingering disputes, such as Canadian bans on American alcohol, persisted.

The current tariffs, though limited in scope, signal a broader trade war that could impact consumers already facing economic pressures. Canada's government has pledged additional support for its workers and businesses, emphasizing its determination to control its own economic future.

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Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days.