US-Canada trade talks collapse; 50 percent tariffs take effect, Canada prepares dollar-for-dollar response

Trade talks between the United States and Canada broke down late Friday, and new American tariffs of 50 percent on a range of Canadian goods took effect early Saturday.

Canadian Prime Minister Mark Carney said he had suspended the negotiations and directed his team to return to Ottawa. He described the final US proposals as unfair and uneconomic. Canada will match the new tariffs dollar for dollar, with counter-measures expected to start on 8 September.

US Trade Representative Jamieson Greer said Canada had declined to finalise a deal under terms agreed earlier in the week. He accused Ottawa of introducing new demands that upset the balance reached in recent days.

The fresh US tariffs apply to roughly 20 billion dollars of Canadian exports, or about 5 percent of the total, and include wine, dairy, cement, clothing and hockey equipment. They come on top of existing duties on steel, aluminium, automobiles and lumber.

Negotiations had intensified after President Donald Trump threatened the 50 percent levy in July. Both sides had discussed lowering US tariffs on Canadian steel and aluminium to 25 percent and on autos to 15 percent, while Canada considered restoring access for US alcohol and adjusting dairy quotas.

Trade between the two countries reached 376 billion dollars in the first half of the year. Economists estimate the new measures could cost Canada tens of thousands of jobs and reduce GDP by 0.3 to 0.6 percent. Ontario, Quebec and British Columbia face the heaviest exposure in manufacturing.

Carney called the US approach a miscalculation designed to hurt and divide. Provincial leaders, including Ontario Premier Doug Ford, backed the dollar-for-dollar response. The episode tests the durability of the long-integrated North American supply chains that both economies have relied on for decades.