Prime Minister Mark Carney has suspended Canada’s trade negotiations with the United States after the two countries failed to reach an agreement ahead of a new round of U.S. tariffs, marking a sharp escalation in the ongoing trade dispute between the longtime economic partners.
“I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Prime Minister Carney announced.
Carney announced Friday evening that Canadian negotiators had been instructed to return to Ottawa, saying last-minute changes proposed by the United States prevented the two sides from reaching an agreement Canada considered acceptable.
The decision comes after days of intensive negotiations as Ottawa and Washington attempted to reach a deal before a U.S. tariff deadline. Canadian Trade Minister Dominic LeBlanc had said Thursday that the two sides were “very close” to an agreement, while negotiations continued into Friday.
However, Carney said the final U.S. position did not meet Canada’s objectives.
“Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal,” Carney said in a statement Friday.
The United States is set to impose tariffs of 50 per cent on billions of dollars’ worth of Canadian goods beginning at midnight. Carney said Canada would respond with matching tariffs on U.S. products.
“Canada will match those tariffs dollar for dollar to protect our workers and businesses,” the prime minister said.
The move represents a significant setback after negotiations appeared to be moving toward an agreement earlier this week.
Canada entered the talks seeking to preserve tariff-free access to the U.S. market for most Canadian businesses while reducing tariffs affecting strategic industries. Ottawa also sought greater certainty for businesses and protection for small and medium-sized companies from additional trade measures.
Carney said his government was unwilling to accept an agreement simply to meet the U.S. deadline.
The breakdown also leaves uncertainty surrounding sectors that had been at the centre of negotiations. Reuters reported ahead of Friday’s deadline that negotiators had been discussing possible reductions in U.S. tariffs on Canadian-built vehicles as well as steel and aluminum.
Despite progress in those discussions, the two governments were unable to settle outstanding issues before the deadline.
Carney defended Canada’s negotiating team, saying officials had worked “in good faith” to protect Canadian interests until the final stages of the talks.
The federal government is also preparing additional measures for Canadian businesses and workers affected by the escalating trade dispute.
Carney said new measures would be announced in the coming days, adding to programs and financial assistance Ottawa has introduced during the broader period of trade tensions with Washington.
The prime minister framed the response as part of his government’s wider strategy to reduce Canada’s economic vulnerability by expanding domestic investment and strengthening trade relationships outside the United States.
Canada and the United States remain deeply integrated trading partners, with cross-border supply chains supporting industries ranging from automotive manufacturing and metals to agriculture and energy. The introduction of additional tariffs could increase costs for businesses operating on both sides of the border and create further uncertainty for investment.
The latest breakdown follows more than 18 months of shifting trade relations between the two countries. Carney has argued that Canada’s relationship with the United States has fundamentally changed as Washington increasingly uses tariffs as part of its broader economic policy.
“We have recognised from the beginning that America has changed, and that we will not return to our old relationship,” Carney said.
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