In a development that will affect consumers and businesses across the United States, Canadian Prime Minister Mark Carney announced Friday night that Canada is suspending ongoing trade negotiations with the United States. Carney said the talks had not produced enough progress to meet Canadian objectives, and he directed Canada’s negotiating team to return to Ottawa.
New tariffs take effect at midnight
Under the U.S. administration’s Section 338 authority of the Tariff Act of 1930, the United States will impose duties of up to 50% on a broad range of Canadian products beginning at midnight. The U.S. Trade Representative estimates the measures will affect about $20 billion worth of imports, including hockey sticks, certain building materials, liquors and selected clothing items.
Canada vows a dollar‑for‑dollar response
Carney immediately signaled that Canada will match the U.S. tariffs dollar for dollar in order to protect Canadian workers and businesses. The reciprocal tariffs are expected to hit the same categories of goods that the United States is targeting.
Background to the breakdown
Negotiators from both sides had been meeting for nearly two weeks, with optimism persisting until the final hours. On Thursday, Canada’s minister for U.S. trade relations met with U.S. Trade Representative Jamieson Greer for several hours. Dominic LeBlanc, Canada’s senior trade official, told reporters the parties were “very close” and would continue working until a deal was reached.
Despite those assurances, talks on Friday stretched into the evening without a compromise. The failure to close a deal coincided with domestic pressure on Carney from several provincial premiers. Manitoba Premier Wab Kinew urged the federal government to “fight” the United States, while Quebec Premier Christine Fréchette said she was still analyzing a request from Ottawa to lift provincial bans on American alcohol sales. Ontario Premier Doug Ford made no public comment.
Legal and economic implications
The Section 338 tariffs have never before been used, and legal challenges are expected. The U.S. Chamber of Commerce warned that higher tariffs could raise costs for American families, disrupt supply chains and threaten the 13 million U.S. jobs that rely on the North American trade pact.
Earlier this week, American negotiators agreed to lower existing duties on cars and metals from 25% to 15%, a concession that was not enough to satisfy Canada’s demands for lower rates on industrial products such as steel and aluminum, which are currently covered under Section 232 of the Trade Act.
Broader context
Carney has previously described former President Trump’s threatened tariffs as a “direct violation” of the United States‑Mexico‑Canada Agreement (USMCA), which Trump negotiated and signed during his first term. Greer, the U.S. trade chief, framed the new 50% duties as retaliation for earlier Canadian measures against the United States, noting that only China and Canada have taken such steps against U.S. trade policy.
Last year, the United States raised tariffs on China to triple‑digit levels before diplomatic talks led to a reduction. The current Canada‑U.S. dispute highlights how quickly trade tensions can escalate when both sides invoke historic trade statutes.
What’s next?
Both governments have indicated they will pursue legal avenues to contest the new duties. In the meantime, businesses that rely on cross‑border supply chains should prepare for higher costs and possible supply disruptions. Consumers may see price increases on everyday items ranging from sports equipment to building supplies as the tariffs take effect.
Original reporting: NBC10 Boston — read the source article.
