Canada vows ‘dollar-for-dollar’ response as US trade talks collapse

Canada has suspended trade negotiations with the United States and vowed to retaliate “dollar for dollar” after last-minute talks failed to prevent a fresh round of steep US tariffs on Canadian goods.

Canadian Prime Minister Mark Carney announced the decision late Friday after negotiations with Washington broke down, accusing the US of making last-minute changes to its proposed terms that Ottawa considered unfair and economically damaging.

The development came as the United States moved ahead with 50% tariffs on about $20 billion worth of Canadian products, escalating an already tense trade relationship between the two long-time allies. The measures took effect on Saturday.

Carney said Canada would match the new US tariffs on a dollar-for-dollar basis in an effort to protect Canadian workers and businesses.

The Canadian leader’s announcement followed three days of intensive negotiations that had initially raised hopes of a breakthrough. Earlier in the week, US President Donald Trump had paused the planned tariffs after saying the two countries had made substantial progress toward a deal.

However, the optimism quickly faded as negotiators struggled to resolve several outstanding issues, including tariffs affecting major Canadian industries and restrictions involving US products in Canada.According to Reuters, the new US duties affect only a portion of Canada’s exports to the United States; about 5%, but they add to existing tariffs on important sectors and could increase pressure on Canadian manufacturers, businesses and workers.

Washington has defended its position, with the Trump administration arguing that Canada was seeking excessive concessions while failing to address American concerns over areas including market access and trade barriers.

Canada, meanwhile, has accused the United States of changing the proposed terms at the last minute, making it impossible for Ottawa to accept the emerging agreement.

The collapse represents a sharp reversal from earlier this week, when Trump said a deal with Canada was close and his administration temporarily suspended the tariffs to allow negotiators more time.

The dispute also threatens to complicate the future of the Canada-United States-Mexico Agreement (CUSMA), the North American trade framework governing much of the countries’ economic relationship. The agreement remains in force, but tensions between Washington and Ottawa could make future negotiations considerably more difficult.

The latest escalation comes as the United States and Canada remain deeply economically intertwined. US-Canada trade reached about $376 billion in the first half of 2026, according to US Census data cited by Axios, making the dispute potentially consequential for businesses and consumers on both sides of the border.

With negotiations now suspended and no immediate new talks scheduled, businesses on both sides face renewed uncertainty over costs, supply chains and access to the neighbouring market.

The latest confrontation marks one of the most serious setbacks in economic relations between the two countries in years, despite their longstanding political, security and commercial ties.