Carney Suspends U.S. Trade Talks, Plans Dollar-for-Dollar Tariffs

Prime Minister Mark Carney suspended trade negotiations with the United States on Friday and ordered Canada’s negotiators back to Ottawa, saying last-minute changes to proposed U.S. terms were unfair and uneconomic.

In a Prime Minister’s Office statement, Carney said the United States would impose 50% tariffs on roughly $28 billion in Canadian goods. Canada would match the duties dollar for dollar to protect its workers and businesses, he said.

A White House proclamation set the duties to take effect at 12:01 a.m. Eastern time Saturday. The proclamation had postponed their effective date from Aug. 19 while negotiations continued.

The duties targeted selected Canadian imports involving alcoholic beverages, dairy products and motor vehicles. The White House said they responded to what it described as discriminatory Canadian trade measures.

A July White House fact sheet said covered products ranged from wine to hockey sticks and cement. The duties applied regardless of whether the goods qualified under the U.S.-Mexico-Canada Agreement.

Energy, potash, products already subject to Section 232 tariffs and certain other goods were excluded.

Carney said recent negotiations had made important progress, but not enough to meet Canada’s objectives. The final U.S. changes also raised doubts about the reliability of any agreement, he said.

Canada had sought to preserve tariff-free access for most Canadian businesses, stabilize the trade relationship and reduce U.S. tariffs on strategic industries. Its other objectives included protecting smaller businesses and maintaining Canada’s flexibility, independence and sovereignty.

Carney said Canada would not return to its previous relationship with the United States because Washington was changing its trade relationships and charging even close allies for market access.

He cited nearly $500 billion in infrastructure projects and trade agreements that he said give Canada preferential access to 1.5 billion consumers. Carney projected that access would double by year’s end.

The prime minister also projected the G7’s second-fastest growth over the next two years and said Canadian jobs were growing at four times the U.S. rate. He said non-U.S. exports were on track to double over the next decade.

The statement described foreign direct investment as the highest in two decades and twice the rate of Canada’s nearest G7 competitor. It did not provide supporting data for those economic comparisons.

Carney said the government would announce additional support for Canadian workers and businesses in the coming days. He said nearly $25 billion had been provided over the past 18 months.

The statement did not identify which U.S. goods would face Canada’s matching tariffs.