Canada suspends U.S. trade talks, vows dollar-for-dollar tariff response

Prime Minister Mark Carney has suspended trade negotiations with the United States, saying last-minute changes to proposed U.S. terms were unfair and raised questions about the reliability of any potential deal.

Carney said Friday (Aug. 21) that Canada’s negotiators have been directed to return to Ottawa after months of talks aimed at preserving tariff-free access to the U.S. market and reducing tariffs on key Canadian industries.

“However, that progress has not been enough to meet our objectives for Canadians,” Carney said in a statement. “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 the U.S. plans to impose a 50 per cent tariff at midnight Aug. 22 on roughly $28 billion worth of Canadian goods and that Canada would match those tariffs dollar for dollar to protect Canadian workers and businesses.

He said the government will introduce additional measures in the coming days to support Canadian workers and businesses, building on nearly $25 billion in support provided over the past 18 months.

Carney said Canada had sought to preserve tariff-free access to the U.S. for most Canadian businesses, provide greater stability to the trading relationship and significantly reduce U.S. tariffs on key strategic industries.

He also said the government recognized that the Canada-U.S. economic relationship has fundamentally changed.

“We have recognised from the beginning that America has changed, and that we will not return to our old relationship,” he said.

Carney said Canada will continue its strategy of strengthening its domestic economy while diversifying its international trade partnerships.

“Our existing free trade deals already provide Canada with preferential access to 1.5 billion consumers, and we are on track to double that market access by the end of this year,” Carney said.

He said Canadian economic growth is accelerating and that the country is on track for the second-fastest growth in the G7 over the next two years.

“Canada has what the world wants,” said Carney. “And we will not allow any nation to determine our future. We will set our own course to keep building Canada strong for all.”