Canadian prime minister suspends trade talks with U.S., setting new 50% tariffs in motion

Trade talks with Canada collapsed late Friday night, setting in motion steep 50% tariffs on a wide swath of Canadian goods. The duties come into effect at the stroke of midnight. After weeks of talks, Canadian Prime Minister Mark Carney announced that while important progress had been made, “that progress has not been enough to meet our objectives for Canadians.” “As a result, this evening, I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Carney said in an emailed statement. The tariffs impact about $20 billion worth of U.S. imports from Canada, according to the U.S. Trade Representative’s office. The import taxes will hit everything from hockey sticks, to some building materials, liquors and certain kinds of clothing. Carney says Canada will immediately retaliate against the U.S. “Canada will match those tariffs dollar for dollar to protect our workers and businesses,” he said. The failure by American and Canadian trade negotiators to reach a deal came after nearly two weeks of furious talks. Officials on both sides had seemed optimistic about a deal up until the very last moment. On Thursday, the Canadian minister responsible for U.S. trade relations met with U.S. Trade Representative Jamieson Greer for several hours. “We’re very close, we continue to make progress and we’re going to stay here and do the work that is necessary until we get to that point,” Dominic LeBlanc told reporters as he left Greer’s office late Thursday. Canadian negotiators met again with their U.S. counterparts on Friday and talks stretched until the final hours of the day. But ultimately, the two sides were unable to reach a compromise. As talks wore on this week, the government of Prime Minister Mark Carney faced some pushback from premiers of Canada’s provinces back home. Manitoba premier Wab Kinew said the Canadian federal government should “fight” Trump. A particular sticking point was a request from Carney to the provincial premiers to lift their bans on American alcohol sales. Quebec premier Christine Fréchette said Thursday that she was still “analyzing” the request, CBC reported. Other premiers, such as Ontario’s Doug Ford — who leads the country’s most populous region — did not make any public remarks on Thursday or Friday. Carney’s office did not immediately respond to a request for comment. The prime minister had previously said Trump’s threatened tariffs would amount to a “direct violation” of the United States-Mexico-Canada Agreement, which Trump had negotiated and signed during his first term. The U.S. Chamber of Commerce warned in a statement this week that “higher tariffs would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on” the North American trade pact. The new tariffs were imposed under presidential authority granted by Section 338 of the Tariff Act of 1930, which has never been deployed before. The law allows the White House to implement duties of up to 50% on any foreign trade partner that “discriminates” against U.S. commerce. Nonetheless, the new Canada tariffs are all but certain to be challenged in court. Canadian officials had been hoping to convince the White House to drop the Section 338 tariffs entirely. In addition to that goal, they had also been looking for a lower tariff rate on industrial products such as steel and aluminum that were imposed under Section 232 of the Trade Act, CBC News and Bloomberg have reported. On Wednesday, Bloomberg reported that American negotiators had agreed to lower the current tariffs on cars and metals from 25% to 15%. Spokespeople for Canadian officials involved in the talks have repeatedly declined to provide additional details about the negotiations to NBC News. But Greer previously said that the new 50% duties on Canada were effectively payback for Ottawa’s retaliation against prior tranches of Trump’s tariffs. “The policy basis for those duties are related to measures that Canada took against the United States,” Greer said recently. “I’ve got two countries in the world that have retaliated against the United States for trade measures: the People’s Republic of China and Canada,” said Greer. “That’s not the kind of company you really want to be running in.” Last year, Trump briefly responded to China’s retaliation by raising tariffs into the triple digits. Talks between Treasury Secretary Scott Bessent and China’s vice premier over months eventually diffused the tensions and tariffs were lowered.