‘At war’: Canada walks away from US trade talks, retaliates to tariffs

Washington: Canada has ended trade negotiations with the Trump administration and is preparing to impose retaliatory tariffs on the US after what Mark Carney framed as unacceptable, eleventh-hour demands from the American side.“We’re walking away from a bad deal,” the Canadian prime minister said at a news conference on Saturday (US time). “We cannot accept what they’ve offered, and we will not give what they’ve asked.”Canadian Prime Minister Mark Carney said he would retaliate “dollar for dollar” against Donald Trump’s latest tariffs.Patrick Doyle/The Canadian Press via APCarney described the two countries as being in a trade war: “You’re at war when you get attacked. We got attacked.”He ordered his trade minister Dominic LeBlanc and chief negotiator Janice Charette to return to Ottawa from Washington on Friday night. The collapse of talks meant new US tariffs of 50 per cent on about $US20 billion worth of Canadian goods came into effect Saturday morning.They impact products as varied as dairy, clothing, machinery, paper and alcohol, and are imposed under a law that allows the US government to respond to unfair trade practices. For example, Canadian provinces stopped buying American alcohol products - such as Kentucky bourbon - after Trump’s initial tariffs early last year.Carney said Canada would respond to the new tariffs “dollar for dollar”, starting September 8, with a focus on steel, dairy, appliances, agricultural equipment, paper and electronics.Canadian Trade Minister Dominic LeBlanc and US Trade Representative Jamieson Greer leaving a meeting in Washington on Wednesday.Kelly Geraldine Malone/The CanadTrump announced the US tariffs in July and set them to start on August 19. Last week, he postponed them by three days as negotiators closed in on a deal. But Carney said the US then sought last-minute changes which made an agreement untenable.That included excluding medium- and heavy-duty trucks from the deal, measures to block Canada’s ability to strike trade deals with other countries, and “continual efforts … to restrict our protections of our language, our culture, and in effect, our sovereignty”, Carney said. He did not detail what those were.“In recent days, the US proposed new terms that were uneconomic, unfair and undermine the net benefits for Canada and called into question the reliability of any deal,” he said.“In short, they asked too much, and they offered too little. More fundamentally, the cumulative effect of US demands revealed the limits of their commitment to a true economic partnership.”Commerce Secretary Howard Lutnick, right, was reportedly pushing for last-minute changes to the proposed deal.BloombergCarney alluded to divisions within Trump’s negotiating team during the final days of talks. Canada’s CBC News reported that Commerce Secretary Howard Lutnick was pushing for some of the last-minute changes.Carney said the Canadian team had been absolutely united but “you cannot say that about the United States administration”. As they drilled down into specific issues, “it became very clear there was not a deal [on the table] that we would sign”.The collapse in trade talks marks another instalment in the souring relationship between the North American neighbours under Trump, which began in February last year when the US president signed an executive order imposing 25 per cent tariffs on Canada on the grounds of fentanyl trafficking.He also repeatedly argued Canada should become the 51st US state, and criticised Carney for his trade deal with China. Meanwhile, Carney delivered speeches on the global stage arguing the old rules-based world order was broken, and middle powers needed to form new alliances and agreements outside the US.“We recognised from the start that America has changed”: Canadian Prime Minister Mark Carney on Saturday.Patrick Doyle/The Canadian Press via APHe echoed that sentiment on Saturday. “We’ve been under no illusions,” he said. “We recognised from the start that America has changed … America wants to tariff everybody on everything.”US trade ambassador Jamieson Greer said no further talks were planned with Canada. He argued the proposed deal was favourable, and blamed the Canadians for retaliating to Trump’s tariffs in the first place.“Two countries have retaliated against the US: the People’s Republic of China, and Canada,” Greer told Fox News on Saturday. “They’ve always had the best deal, and they still would have had an even better deal, but they didn’t want that.”The trade war’s new phase comes as Australia faces fresh US tariffs of 12.5 per cent, imposed after the US determined that Australia did not have sufficient measures against imports made using forced labour. Canberra is also on watch for blowback to its efforts to force large technology companies to pay for journalism.Edward Alden, a trade expert and senior fellow at the Council on Foreign Relations, said he admired Canada’s willingness to stand up to the US on trade. But he warned it was a mistake to walk away from the negotiations.“Look at the Japan or EU [European Union] deals,” he wrote on X. “They made vast promises to Trump that will never be delivered. He has the attention span of a gnat. Do a deal and let him forget Canada again.”Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.Michael Koziol is the North America correspondent for The Age and Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political reporter in Canberra.Connect via X or email.From our partners