Carney Vows 'Dollar-for-Dollar' Response as US-Canada Trade Talks Collapse

OTTAWA/WASHINGTON, Aug 22: Canadian Prime Minister Mark Carney vowed Saturday that Canada will match US tariffs "dollar for dollar to protect our workers and businesses," after last-minute negotiations between Washington and Ottawa failed to produce an agreement.

The collapse of talks means new 50-percent duties affecting approximately $20 billion of Canadian exports to the United States took effect on Saturday.

US Trade Representative Jamieson Greer told reporters Friday that "tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week." He said the Trump administration had offered "significant tariff reductions on steel, aluminum, autos and lumber" in exchange for concessions from Canada, but Ottawa maintained what he called "prolonged retaliation" against the United States.

Last-minute changes blamed

Carney blamed the breakdown on shifting US demands. "Last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal," he said in a statement.

Canada's top negotiator Dominic LeBlanc told reporters that officials still "have more work to do" after hours of trade talks Friday. LeBlanc and Greer had also met for approximately three hours on Thursday.

The surprise announcement came after US President Donald Trump said the United States "should be able to have a deal with Canada," citing his "good relationship" with Carney.

'Discriminatory treatment' allegation

Canadian regional leaders previously said the United States was particularly irritated by one retaliatory measure: the removal of US alcohol and wine from liquor stores. The White House had alleged "discriminatory treatment" by Canada against US alcohol, automobile, and dairy products in introducing the duties.

The tariffs were originally set to take effect Wednesday, before Trump issued a last-minute delay of three days, citing major progress in talks.

Economic strain and long-term shift

Canada has been seeking relief from Trump's tariffs on autos, steel, and aluminum, which have battered the country's economy, forced job losses, and strained what was once an iron-clad trade relationship.

Carney has repeatedly told Canadians that relations with the United States have been forever changed, regardless of what happens with an individual trade deal. He says the country must diversify and reduce its reliance on the United States, which currently accounts for roughly 70 percent of Canadian exports.

Beyond the ongoing negotiations, the United States and Canada still have to agree on revisions to the North American free trade agreement, USMCA, which Trump declined to renew last month.