OTTAWA (Dispatches) – U.S.-Canada trade talks fell apart at the last minute, with fresh 50 percent tariffs on billions of dollars of Canadian goods taking effect and Prime Minister Mark Carney promising to retaliate.
The U.S. tariffs kicked in Saturday on hundreds of data-x-items the U.S. buys from Canada, such as plywood, electrical equipment and hockey gear, totaling around $20 billion. Carney said he suspended talks and that his government would match those duties “dollar for dollar to protect our workers and businesses”. U.S. officials are pledging to present President Donald Trump with options to escalate if he does.
The two sides blamed each other for the collapse. U.S. Trade Representative Jamieson Greer said the Canadian negotiators made 11th-hour demands that upended a draft deal worked out over days of negotiations.
“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days,” Greer said in a statement.
Carney, meanwhile, argued that it was the U.S. that had changed its position, saying “last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal”.
It wasn’t immediately clear what U.S. sectors Carney will target in his retaliation, nor how quickly the U.S. would take any additional steps in turn, but the late-hour posturing signaled the potential for a spiraling trade fight between the two economies.
A U.S. official, speaking on condition of anonymity late Friday, said there were no new talks scheduled. The administration will provide Trump options to level out the playing field if Canada retaliates, the official said.
The failure to reach an accord dials up the tension between two longtime allies that conducted almost $900 billion of trade in goods and services last year. In addition to tariffs, Trump has publicly mused about making Canada a U.S. state, referred to its prime ministers as “governor” and claimed the country couldn’t survive without the U.S.
It underscored how Trump appeared to get ahead of himself on Tuesday night, when he announced less than two hours before the tariffs were originally set to go into effect that the two sides had a deal. Canadian officials later said important elements still needed to be worked out. 
The two sides had been discussing a deal that included lowering tariffs on certain Canadian steel and aluminum to 25 percent, cutting duties on Canadian autos to 15 percent and eliminating a 10 percent lumber tariff. The U.S. official said talks ended when Canada sought additional concessions in a couple of those areas, but declined to say which.