US-Canada trade deal collapses as Trump’s 50% tariffs go into effect
Washington Examiner · RC · trust 58/100
A trade deal between the United States and Canada fell apart in the eleventh hour ahead of President Donald Trump’s Friday night deadline, pushing the Trump administration’s 50% tariffs on its northern neighbor into effect overnight.
Canada will now face a 50% tariff on about $28 billion worth of Canadian products imported into the U.S. Canadian Prime Minister Mark Carney announced shortly before midnight on Friday that his country will match these tariffs dollar for dollar on U.S. goods moving into Canada.
The news is a far cry from the optimistic outlook the two countries shared on Tuesday when Trump announced his administration had reached a deal with Carney’s to avoid a tariff crackdown. It also marks the latest development in the tenuous relationship between the two world leaders that has centered on the push-and-pull of tariff threats and negotiations.
Carney said in a statement that he pulled Canada out of negotiations after the United States made last-minute changes to the framework.
“I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Carney said. “They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute. However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
Carney did not specify what these “last-minute changes” were in his note.
A statement from the office of U.S. Trade Representative Jamieson Greer contrasted Carney’s account, saying Canada had walked away under the same terms that were agreed upon earlier in the week.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” Greer said in the statement. “Despite the U.S. 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.
“In addition, Canada is continuing to maintain its prolonged retaliation against the United States, including, among other things, flat-out prohibitions on certain American goods and services,” Greer continued.
U.S. and Canadian negotiators had been meeting in Washington, D.C., this week to hammer out an agreement after over a year of turmoil over Trump’s tariffs. Trump first threatened to impose the sweeping 50% tariffs on a range of Canadian goods on July 20, 2026.
The 50% U.S. tariffs will affect Canadian products ranging from hockey sticks to automobiles to dairy and alcohol.
The initial Tuesday deal, which fell apart, had included negotiations over lowering U.S. levies on Canadian steel, aluminum, automobiles, and lumber, per the U.S. Trade Representative’s office, which called the trade agreement a “missed opportunity.”
“The U.S. offer was also forward looking, and included a historic economic and national security partnership to cooperate on export controls, combat transshipment, enhance digital trade, and align certain external tariffs,” Greer said in the statement . “The offer would have led to supply chain coordination on aerospace, complementary actions to address unfair trade practices, critical minerals cooperation, increased enforcement against imports produced with forced labor, and the announcement of formal U.S.-Mexico-Canada Agreement (USMCA) negotiations.”
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