Topline
Canadian Prime Minister Mark Carney said retaliatory tariffs against the United States will start the Tuesday after Labor Day after attempts between the two nations to reach a trade deal collapsed Friday night, following “unfair” and “uneconomic” changes to terms that were proposed at the “last minute.”
The Canadian and US flags on Feb. 2, 2025.
AFP via Getty Images
Key Facts
Carney, in an address Saturday, said Canada was willing to drop remaining retaliatory tariffs on steel, aluminum and cars if the United States substantially lowered its own, but that U.S. negotiators “asked too much and offered too little.”
As a result, he said new tariffs will be levied against the U.S. targeting steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.
Carney said more specifics will be announced in the coming days.
Beer, cars, dairy and a long list of other Canadian imports were hit with a 50% tariff Saturday morning in addition to existing taxes on Canadian steel, aluminum and lumber.
The two countries have been negotiating the tariffs, first announced in July, for more than 30 days until Carney on Friday night said he would be suspending negotiations.
He said the tariffs and how the negotiations unfolded underscore his belief “America has changed, and that we will not return to our old relationships.”
U.S. Trade Representative Jamieson Greer said the suspension of negotiations was a “missed opportunity for Canada to partner with the United States.”
The tariffs apply to about 5% of the $380 billion in Canadian goods that are imported to the U.S. each year and while economists have said the tariffs themselves likely won’t overly impact American consumers, they’ve hurt the “extremely important” relationship between the two countries.
CRUCIAL QUOTE
“(Canadian negotiators) worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” Carney said. “However, last-minute changes in the U.S. proposed terms were unfair, uneconomic and called into question the reliability of any deal.”
WHAT TO WATCH FOR
How much the tariffs impact the American economy. The tariffs will likely case the price of American exports exports to skyrocket in Canada and buyers may switch to domestic alternatives or import from other countries, cutting into revenues for American farmers and manufacturers.
Key background
Trade tensions with Canada have been escalating since 2025, when the U.S. implemented broad national tariffs that set off negotiations over regional trade and exemptions. In July, the U.S. announced targeted 50% tariffs on a wide swath of Canadian goods with a 30-day window for negotiations. A three-day extension moved the deadline Aug. 21 but negotiations broke down late Friday. The tariffs apply to products including heavy machinery, plastic polymers, home goods, light fixtures, paper products, specialized medical supplies and other imports. Other Major Canadian exports, like crude oil, natural gas and primary steel/aluminum were explicitly excluded from the new tariffs.
TANGENT
Trump on Friday also said the government will allow up to 300,000 metric tons of ground beef to be imported without tariffs amid concerns over food affordability. He said companies importing the beef, which he did not name, promised to sell it at 25% below current market prices. Beef prices have soared this year due as the nation’s cattle herd hits a 70-year low.
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