Canada declines to finalize trade pact with US as 50% tariffs take effect

The US has said that Canada has declined to finalize a trade pact with Washington, minutes before tariffs announced by US President Donald Trump were set to kick in.

"Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week," US Trade Representative Jamieson Greer told reporters.

This means that 50% tariffs took effect at 12:01 a.m. EDT (0401 GMT) on Saturday.

Canada vows to retaliate 'dollar for dollar'

Canadian Prime Minister Mark Carney said he suspended negotiations after he described last-minute changes to the terms of the deal as "unfair."

"Last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal," Carney said.

Canada would retaliate immediately, he said, adding that it would match US tariffs "dollar for dollar."

What do we know about the US-Canada trade negotiations?

Washington and Ottawa have been racing to reach an agreement before steep new US tariffs, which US President Donald Trump announced in July, were due to take effect.

Canada's minister responsible for trade with the US had said late Friday that a trade deal was not yet finalized.

"We have more work to do. We're going to continue working up until the last minute. Our job is not finished," Dominic LeBlanc told reporters following talks with US Trade Representative Jamieson Greer.

LeBlanc's comments came after President Donald Trump said Friday the US "should be able to have a deal with Canada," citing his "good relationship" with Carney.

In July, Trump threatened to impose new 50% duties on some Canadian products unless a deal was agreed within 30 days.

As that deadline neared, on Wednesday he announced a temporary pause on the tariff threat, saying a deal was in its final stages.

Reuters reported that the deal was expected to reduce US tariffs on Canadian-made vehicles from 25% to 15% and halve duties on Canadian steel and aluminum to 25%.

The US currently accounts for roughly 70% of Canadian exports, which makes Canada vulnerable to punitive US trade actions.

Carney's big challenge

Even if Washington and Ottawa had reached a deal, Carney was expected to face a difficult task of selling it to Canadians and the premiers of the country's 10 provinces.

A Leger poll released Wednesday found that 56% of Canadians want the government to "take a hard line" and make no further concessions to the US.

Carney has been urging major provinces to reconsider putting US alcohol back on the shelves. The boycott was imposed last year as a retaliatory measure to tariffs Trump put on Canadian goods.

Quebec Premier Christine Frechette said she would assess the deal before taking a position, while Manitoba Premier Wab Kinew told reporters that Canada should continue to "fight."