Canada vows ‘dollar-for-dollar’ retaliation after US trade deal talks collapse
Canadian prime minister Mark Carney and US president Donald Trump at the White House in Washington, DC, Tuesday, May 6, 2025. Picture: Adrian Wyld /The Canadian Press via AP
Canadian prime minister Mark Carney has promised to match US tariffs “dollar for dollar”, after the two sides failed to agree a trade deal by the deadline of midnight on Friday.
Canadian officials had worked hard in good faith, but “last-minute changes in the US proposed terms were unfair, uneconomic and called into question the reliability of any deal”, Carney said in a statement.
He said of the 50% tariffs the US was imposing: “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
The US tariffs will affect about US$20 billion worth of Canadian products after last-ditch negotiations failed to resolve the latest strain in already tense relations between the historic allies.
US trade representative Jamieson Greer said the breakdown represented a “missed opportunity for Canada”.
“Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week,” he said in the statement shortly before midnight on Friday.
“Despite the US 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 the US offer was “forward-looking” and included “a historic economic and national security partnership”.
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The retaliation escalates the two countries’ trade conflict and calls into question the future of a North American trade pact between the US, Canada and Mexico that is crucial to industry in all three countries.
Donald Trump’s import taxes will hit about 5% of what Canada ships to the US every year, including products ranging from hockey sticks to tongue depressors.
Canada sought concessions on steel, aluminium, vehicles and lumber that the US was unwilling to provide, a senior Trump administration official told reporters.
The political impact of the breakdown will likely be even bigger than the economic fallout. The countries traded $880bn worth of goods and services last year.
The tariffs were initially supposed to kick in at 12.01am Wednesday, but Trump extended the deadline for three days to allow talks to continue. No further talks have been planned.
Carney said his government would announce additional support for Canadian workers and businesses in the coming days, and that Canada’s goal throughout the negotiations had been to secure the best possible agreement, “never a deal at any price or on any deadline”.
Canadian business warns of economic impact The move was supported by Ontario premier Doug Ford, who said on X: “Team Canada needs to stand together more united than ever before. The prime minister has my full support for a strong response – tariff for tariff, dollar for dollar. As we fight to protect Canadian sovereignty and economic security, everything needs to be on the table. Ontario is ready to do its part.”
Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the tariffs “a body blow to North American competitiveness”, warning they would raise costs for Americans while threatening Canadian customers, investment and small businesses.
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