Washington and Ottawa announced late Friday that they failed to reach a trade agreement, with the United States set to impose a 50% tariff on certain Canadian imports, escalating tensions between the long-standing allies.
A senior official in President Donald Trump's administration stated that tariffs under Section 338 would apply to Canadian goods valued at approximately $20 billion, effective from midnight Saturday.
Canadian Prime Minister Mark Carney announced the suspension of trade negotiations and said Canada would respond in kind to the new tariffs.
The U.S. administration's decision followed three consecutive days of talks in Washington between Canadian Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamison Greer.
Carney stated in a release, "I have decided to suspend trade negotiations with the United States, directing Canadian negotiators to return to Ottawa."
He added, "Negotiators made strenuous efforts, in good faith, to defend Canadians' interests throughout these talks up to the final moment. However, last-minute changes to the proposed terms by the U.S. were unfair and uneconomical, casting doubt on the credibility of any agreement."
While the new measures affect a relatively small portion of Canadian exports, they add to existing U.S. tariffs on steel, lumber, and automobiles. These new tariffs could hinder Canada's fragile economic recovery and affect how the neighboring countries approach broader free trade agreement negotiations in the coming months.
The tariffs are applied regardless of whether Canadian goods qualify for preferential treatment under the United States-Mexico-Canada Agreement, which protects a significant portion of Canadian industry from previous U.S. tariffs.