US, Canada fail to reach trade deal

WASHINGTON/OTTAWA -- The United States and Canada failed to reach a trade deal on Friday, and the White House said that it would impose 50-percent tariffs on certain imports from Canada on Saturday.

Meanwhile, Canada's Prime Minister Mark Carney said that Canada would retaliate on the new tariffs.

Carney said Canada has suspended trade negotiations with the United States and recalled its negotiators to Ottawa, following new tariff threats from Washington.

The decision was made after last-minute changes proposed by the US side were deemed "unfair, uneconomic, and called into question the reliability of any deal," he said in a statement.

The United States imposed a 50-percent tariff on 20 billion US dollars' worth of Canadian goods on Saturday that came into effect just after midnight (0400 GMT).

In response to the US measure, Carney said Canada will match those tariffs "dollar for dollar" to protect its workers and businesses.

In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly 25 billion dollars in support provided over the past 18 months, he said.

"Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walkbacks of other commitments by Canada have upended the careful balance reached in the past days," US Trade Representative Jamieson Greer said in a statement on X.

"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," he said.

Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the collapse of negotiations a "body blow to North American competitiveness in this self-defeating trade saga."

"A whopping, non-absorbable tariff is not sustainable or viable for business," she said in a statement. "For a small Canadian exporter operating on tight margins, this isn't an abstract trade dispute. It means looking at your orders, your payroll and your employees and asking what you can still afford."

"Americans will see their costs go up, and Canadians will see customers, investment and small businesses disappear," said Laing, also a member of Carney's Advisory Committee on Canada-US Economic Relations.

This is deeply troubling for thousands of small Canadian exporters, as 40 percent of small exporters sell items on the new 10-plus-page list of items facing 50 percent tariffs, said Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB).

"Many CFIB members have said this will end their US sales and some have reported this will kill their businesses," he posted on X. "I hope that discussions continue and an interim deal can be quickly found."

US President Donald Trump signed three proclamations on July 20 to impose additional 50-percent tariffs on certain goods from Canada in response to Canada's "discriminatory treatment of American products."

The collapse in negotiations marked a sharp reversal from three days earlier. Trump said late Tuesday that the tariffs scheduled to take effect Wednesday were paused for three days, and that the United States and Canada had reached a deal pending the finalization of formal documents.

Carney later said in a statement that substantial progress has been made, "although there is important work still to be done."

The rift comes as the United States, Mexico and Canada are trying to renew the US-Mexico-Canada Agreement (USMCA), a trade agreement that Trump negotiated in his first term and once praised as a triumph.

The United States has begun formal talks with Mexico to revamp the agreement, but talks with Canada have not yet begun.

The USMCA is a trilateral trade pact that replaced NAFTA when it took effect on July 1, 2020. On July 1, 2026, the United States officially declined to renew the agreement for another 16-year term, triggering an annual review process until the pact expires in 2036.