“You’re at war when you’re attacked, and we got attacked,” a defiant Canadian Prime Minister Mark Carney said on Saturday as he announced “dollar-for-dollar” retaliatory tariffs on US goods from September 8, escalating a bitter trade war between the two long-standing allies.
The Canadian counter-tariffs will target US goods across sectors including dairy, steel, household appliances, farming equipment, electronics, and pulp and paper, Carney said in a televised speech. On the other hand, the US's 50 per cent tariffs, imposed early Saturday, affect roughly 5 per cent of Canada's annual exports to the United States, with products ranging from hockey sticks and tongue depressors to industrial goods.
In his 22-minute speech, Carney said Ottawa had been prepared to remove its existing counter-tariffs on US aluminum, steel and motor vehicles if Washington substantially reduced its own levies. Canada was also willing to encourage provinces to resume sales of American alcohol, he added.
"But the final terms offered by the Trump administration were unacceptable. They asked too much and offered too little. We cannot accept what they offered, and we will not give what they asked. We were not prepared to compromise Canada’s sovereignty or undermine our key industries," he said.
Carney said the trade war marked a fundamental change in Canada's relationship with its southern neighbour. “We’ve recognised from the start that America has changed. We recognise that sometimes, its signature is written in pencil,” he said.
“We’re not going back to the old relationship,” the Canadian Prime Minister added.
The breakdown in talks marked a sharp reversal from just 48 hours earlier, when officials from both sides appeared close to reaching an agreement after three days of negotiations in Washington between Canadian Minister responsible for US Trade Dominic LeBlanc and Jamieson Greer.
The two sides failed to reach an agreement despite more than a year of negotiations, prompting Carney to suspend the talks and direct Canada's negotiating team to return to Ottawa. “They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” Carney said, accusing Washington of changing its proposed terms at the final stage.
Carney said late additions to the US proposal would have reduced tariff concessions for Canadian-built automobiles, restricted Canada's ability to negotiate independent trade agreements with other countries and weakened safeguards covering national sovereignty, language and culture. He described the conditions as unacceptable.
Ontario Premier Doug Ford backed Canada's retaliatory tariff move, saying Carney had his “full support” to retaliate “tariff for tariff, dollar for dollar” and that “everything needs to be on the table”.
The Trump administration, however, said it had offered concessions on key Canadian sectors. Greer told Fox & Friends Weekend that Washington had offered tariff cuts on lumber, steel and automobiles — areas he acknowledged were “sensitive” for Canada. “They’ve always had the best deal, and they still would have an even better deal, but they didn’t want that,” Greer said.
The collapse of the talks has cast fresh uncertainty over the future of the USMCA, the trilateral trade agreement between the United States, Canada and Mexico that underpins a vast amount of commerce across North America.
The breakdown has also deepened tensions between the two neighbours, with Trump using tariffs to pressure Canada and repeatedly suggesting it could become the 51st US state.
The trade confrontation has highlighted Canada's deep economic dependence on the United States even as Ottawa seeks to diversify its trading relationships.
More than 70 per cent of Canadian goods exports go to the US, according to the Canadian government's State of Trade 2026 report, while other estimates put the figure as high as 77 per cent. Just over half of Canada's services exports are also destined for the American market.
The stakes extend beyond merchandise trade. Trade in goods and services accounts for about two-thirds of Canada's GDP, while exports support nearly one in five Canadian jobs, according to the government report.
The latest dispute is not the first trade confrontation between Washington and Ottawa. The two countries have repeatedly clashed over issues including access to Canada's regulated dairy market and Canadian softwood lumber exports to the US.
Even reduced tariffs under the latest US proposal would have left Canada with less favourable access to the American market than it enjoyed under the 1989 Canada-US Free Trade Agreement, the North American Free Trade Agreement and its successor, the USMCA.
