Canada vows to match Trump's tariffs ‘dollar for dollar’ as trade deal with US falls apart

Canada will match US tariffs “dollar for dollar” after Washington moved to impose a 50% tariff on roughly C$28 billion of Canadian goods, Prime Minister Mark Carney said on Friday, as Ottawa suspended trade negotiations with the United States and recalled its negotiators.

The US tariffs are set to take effect at midnight, Carney said. The decision followed three days of intensive negotiations in Washington that failed to produce an agreement before the deadline.

“However, that progress has not been enough to meet our objectives for Canadians,” Carney said.


“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.”

Also Read: Canada refuses to finalise US trade deal, Trump official Jamieson Greer says

Canada draws the line

Carney said Canada had spent the past 18 months seeking to preserve tariff-free access to the US for most Canadian businesses, secure lower tariffs for key industries and protect small and medium-sized companies.

He said Ottawa had recognised early that the relationship with Washington had changed.

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

“Our government understood, before many, that America is altering all its trade relationships. Putting tariffs on its closest allies and charging for access to its vast market.”

Carney said Canada had nevertheless continued negotiating in an effort to secure better access to the US market and greater certainty for Canadian businesses and workers.

“Throughout, our goal has been to secure the best deal for Canadians, never a deal at any price or on any deadline,” he said.

Tariffs go dollar for dollar

Carney said the US planned to impose a 50% tariff at midnight on roughly C$28 billion of Canadian goods.

“Canada will match those tariffs dollar for dollar to protect our workers and businesses,” he said.

He added that the Canadian government would introduce further measures to support workers and businesses, building on nearly C$25 billion in support provided over the past 18 months.

Also Read: Canada premier calls Trump ‘bad person’, urges Ottawa not to cave in trade talks

The US side has given a different account of the collapse. US Trade Representative Jamieson Greer said Canada had declined to finalise a deal despite an American offer that would have reduced tariffs and given Canada what Washington described as the best position of any exporter to the US.

The talks had included discussions over cutting US tariffs on Canadian-built vehicles from 25% to 15% and reducing tariffs on Canadian steel and aluminium from 50% to 25%. But differences remained over Canadian restrictions on US alcohol and dairy access, among other issues.

Washington says Ottawa walked away from a better deal

The US has offered a sharply different account of the breakdown. US Trade Representative Jamieson Greer said Canada declined to finalise an agreement despite an offer that would have “reduced tariffs substantially” and put Canada “into the best position of any exporter to the United States.”

Greer also accused Ottawa of continuing its retaliation against US goods. The two sides had been discussing lower US tariffs on Canadian-built vehicles and steel and aluminium, but remained divided over Canadian barriers affecting US alcohol, dairy and other exports.

The US is now set to impose the 50% tariffs on nearly $20 billion of Canadian imports from Saturday, while Canada has said it will respond dollar for dollar.

Ottawa turns beyond the US

Carney said the breakdown would not change Canada’s broader economic strategy of building strength at home and diversifying its trade relationships.

“That strategy is working,” he said.

Canada is advancing nearly C$500 billion in major infrastructure projects, while its existing free trade agreements provide preferential access to 1.5 billion consumers, according to Carney. Ottawa expects to double that market access by the end of this year.

“Canadian economic growth is accelerating, and we are on course to have the second-fastest growth in the G7 over the next two years,” Carney said.

“Our economy is creating jobs at four times the rate of the United States.”

He also said Canadian exports to non-US markets were on track to double over the next decade and that foreign direct investment in Canada was at its highest level in two decades.

Carney ended with a broader message about Canada's economic independence.

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

The breakdown leaves the two countries facing a fresh tariff confrontation despite their deeply integrated economies and years of close trade ties.

Why the 50% tariffs are coming

The latest duties stem from US President Donald Trump’s decision in July to invoke Section 338 of the Tariff Act of 1930, a rarely used provision that allows the president to impose tariffs of up to 50% on imports from countries deemed to have discriminated against US commerce.

The tariffs target nearly $20 billion of Canadian goods and were initially scheduled to take effect in July. Trump later paused them for three days to give negotiators more time to reach an agreement.

That extra time has now run out.

A senior Trump administration official said there were no further negotiations scheduled, leaving the dispute at an impasse as Washington prepares to impose the duties.