Canada fires back as Carney walks away from Trump trade deal Canada has dramatically hardened its stance towards the United States after Prime Minister Mark Carney suspended trade negotiations with Washington just minutes before a deadline, declaring that Canada would respond to US tariffs “dollar for dollar.” The breakdown came after weeks of intense negotiations aimed at preventing a new wave of US tariffs on Canadian goods. Earlier in the week, President Donald Trump had paused the threatened measures and suggested that the two countries were close to a trade agreement that could be “very good” for both sides. That optimism has now evaporated. Carney rejects last-minute US demandsCarney said negotiations had produced “important progress” but had ultimately failed to meet Canada’s objectives. He accused Washington of making last-minute changes to its proposed terms that were “unfair” and “uneconomic”, while warning that they raised questions about the reliability of any eventual agreement. US Trade Representative Jamieson Greer offered a sharply different account, accusing Canada of refusing to finalise a deal after Washington had offered it preferential treatment. Greer said new Canadian demands and reversals had upset the balance reached during the negotiations. The collapse means Trump’s threatened 50% tariffs on a broad range of Canadian products are now set to hit, including wine, dairy, cement, clothing and hockey equipment. Those measures come on top of existing US tariffs covering Canadian steel, aluminium, automobiles and lumber. Canada promises retaliationCarney has now made clear that Canada will not simply absorb the new American tariffs. He said Ottawa would impose reciprocal tariffs on US goods “dollar for dollar”, a position immediately backed by Doug Ford, the premier of Ontario and one of Canada's most outspoken political figures. Ford declared that Carney had his full support for a response based on “tariff for tariff, dollar for dollar.” That could turn the dispute into another major escalation between two countries whose economies and supply chains are deeply intertwined. A deal that appeared within reachOnly days ago, negotiators were reportedly discussing significant reductions in some of the most damaging US tariffs. Under the emerging proposal, American tariffs on Canadian steel and aluminium could have fallen from 50% to 25%, while tariffs on Canadian automobiles could have been reduced from 25% to 15%. In return, Canada was being pressed to make concessions of its own, including greater access for American dairy products and the removal of restrictions on US alcohol sales imposed by several Canadian provinces. Washington has also demanded that Canada remove its remaining retaliatory tariffs on American automobiles. But the two sides could not bridge their differences before the deadline. Trump’s tariff war hits America's closest neighbourThe dispute reflects the wider transformation of US trade policy since Trump returned to the White House. For decades, Canada and the United States operated under a largely free-trading relationship, with enormous volumes of goods crossing their shared border every day. Trump's tariff programme has changed that relationship dramatically. The US Chamber of Commerce has warned that higher tariffs could damage both economies, increase costs for American consumers and disrupt supply chains supporting millions of American jobs. Canada now faces a difficult choice: absorb the economic damage from Trump's tariffs, retaliate and risk provoking Washington into an even harsher response, or eventually return to the negotiating table. For the moment, Carney has chosen confrontation. And with Washington warning that it will not tolerate Canadian counter-tariffs, the trade war between America's closest neighbour and its biggest economic partner may be about to get considerably uglier. SOURCE
