Canada and the U.S. were unable to reach a trade deal by a midnight Saturday deadline, meaning that 50% tariffs President Donald Trump imposed on Canadian alcohol, dairy, hockey sticks, cement and other items will now go into effect.
Canadian Prime Minister Mark Carney said in a statement Friday night that while in recent weeks, there was progress made toward “Canada’s position as having the best deal in the world with the U.S.,” this was not enough “to meet our objectives for Canadians.”
Because of this, Carney said, he decided to suspend trade negotiations with the U.S. and directed Canadian negotiators to go back to Ottawa.
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“They have 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.”
Now, with the U.S. now putting into place a 50% tariff on about $20 billion in Canadian imports, Carney said “Canada will match those tariffs dollar for dollar to protect our 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 in support provided over the past 18 months,” Carney added.
At a press conference Saturday, Carney said the retaliatory tariffs are set to go into effect on Sept. 8.
“Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, electronics,” Carney said, adding that it will also involve products subject to “unjustified Section 232 and 338 tariffs.”
“This is a focused response… to protect and defend our industries and allow them to compete with U.S. products in the Canadian market,” Carney said.
Ontario Premier Doug Ford said on X that he fully supports Carney’s “tariff for tariff, dollar for dollar” approach.
“As we fight to protect Canadian sovereignty and economic security, everything needs to be on the table,” Ford said. “Ontario is ready to do its part.”
U.S. Trade Representative Jamieson Greer on X said Canada declined to finalize a trade deal under terms agreed to “earlier this week.”
In his statement, Greer said the U.S. offered “significant” reductions to tariffs on steel, aluminum, autos and lumber.
“Despite the U.S. 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,” he said. “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.”
Wednesday at midnight was the initial deadline for the tariffs, but Trump said on Truth Social Tuesday that he paused them for three days “based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!”
The tariffs are set under Section 338 of the Tariff Act of 1930, marking the first time it has been used. The trade law allows a president to impose tariffs of up to 50% on imports from countries that are decided to be discriminatory against U.S. commerce.
Dan Kelly, president of the Canadian Federation of Independent Business, previously told CNBC the 50% tariff will have significant impacts on the organization’s 103,000 members, and “grind their U.S. sales to a halt.”
Some businesses, even before the Saturday deadline, had U.S. buyers stop future orders over tariff concerns, he said.
“A 50% tariff essentially makes a product uneconomic to sell into a particular market,” Kelly said.
Trump also enacted tariffs last year on goods from Canada, saying they were done through the International Emergency Economic Powers Act. These were struck down by the Supreme Court, which in February 2026 ruled that the IEEPA doesn’t give the president the authority to enact tariffs on Canada.
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