The Canadian prime minister, Mark Carney, has promised to match US tariffs “dollar for dollar” after the two sides failed to agree a trade deal by the deadline of midnight on Friday.
The trade row is the biggest rupture in recent relations between Washington and one of its closest allies and trading partners as Donald Trump’s bellicose foreign policy angered officials in Ottawa.
The two sides appeared close to a deal on Friday to lower tariffs on steel, aluminium and cars, but was scuttled at the last minute. The two sides blamed each other for the collapse.
Canadian officials had worked hard in good faith but “last-minute changes in the US proposed terms were unfair, uneconomic and called into question the reliability of any deal”, Carney said in a statement.
US officials accused Canada of collapsing the deal by seeking additional concessions at the last minute.
Carney recalled his negotiators as Canada vowed to match Washington’s tough approach. No further talks are planned.
The prime minister said of the 50% tariffs the US was imposing: “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
The US tariffs will affect about $20bn worth of Canadian products, and the US trade representative, Jamieson Greer, said the breakdown represented a “missed opportunity for Canada”.
“Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week,” he said in the statement shortly before midnight on Friday. “Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.”
Greer said the US offer was forward-looking and included “a historic economic and national security partnership”.
The retaliation escalates the two countries’ trade conflict and calls into question the future of a North American trade pact between the US, Canada and Mexico that is crucial to industry in all three countries.
Trade experts have said the tariffs could subject some already-vulnerable sectors to economic strain, potentially leading to job losses and stores closing.
Trump’s import taxes will apply to about 5% of what Canada ships to the US every year, including products ranging from hockey sticks to tongue depressors.
Canada sought concessions on steel, aluminium, vehicles and lumber that the US was unwilling to provide, a senior Trump administration official told reporters.
The political impact of the breakdown is likely to be even bigger than the economic fallout. The countries sold each other $880bn worth of goods and services last year, and many Canadians and Americans work in the other country.
Carney, whose willingness to stand up to Trump has made him popular in Canada, has said that “America has changed,” and that the two countries would not return to their old relationship.
The Canadian public has also been incensed by US policy towards their country, particularly Trump’s comments about turning Canada into the 51st US state. A petition to expel the US ambassador to Canada, Pete Hoekstra, has collected about 248,000 signatures, accusing him of normalising the notion of the US annexing Canada.
The tariffs were initially supposed to kick in at 12.01am on Wednesday but Trump extended the deadline for three days to allow talks to continue.
Carney said his government would announce additional support for Canadian workers and businesses in the coming days, and that Canada’s goal throughout the negotiations had been to secure the best possible agreement, “never a deal at any price or on any deadline”.
The move was supported by Ontario’s premier, Doug Ford, who said on X: “Team Canada needs to stand together more united than ever before. The prime minister has my full support for a strong response – tariff for tariff, dollar for dollar. As we fight to protect Canadian sovereignty and economic security, everything needs to be on the table. Ontario is ready to do its part.”
The head of the Canadian Chamber of Commerce, Candace Laing, called the tariffs “a body blow to North American competitiveness”. She said they would raise costs for Americans while threatening Canadian customers, investment and small businesses.
