Both nations accused the other of scuttling the deal, with Canadian Prime Minister Mark Carney citing "last-minute changes" by the Trump administration and US Trade Representative Jamieson Greer pointing to "new demands and walk backs" by the Canadians.
Asked earlier on Friday if a deal was within reach, Trump responded, "I think so, yeah, we'll see." But by late Friday night, it was clear the talks had collapsed entirely as Carney summoned Canada's representatives back to Ottawa.
In his statement on Friday night, Carney said, "We have recognized from the beginning that America has changed, and that we will not return to our old relationship. Our government understood, before many, that America is altering all its trade relationships. Putting tariffs on its closest allies and charging for access to its vast market."
CBC News reports:
The fresh American tariffs and the promise of Canadian counter-tariffs are a significant escalation in the dispute between Canada and the US, two countries once seen as being as close as can be on trade.
Canadian Trade Minister Dominic LeBlanc met with Greer, his American counterpart, throughout the week in Washington, DC, to try to secure a deal before the administration's Friday night deadline.
The terms of the tentative deal were not made public, but separate sources have said the agreement would have lowered sectoral tariffs that have been crushing the Canadian aluminum, steel and automobile sectors for months. In return, Carney asked Canadian premiers to consider ending provincial bans on American alcohol.
While Carney said the Canadian government operated to strike "a fair deal that would provide the best access to the US market and greater certainty to Canadian businesses and workers," ultimately the "progress has not been enough," leading to the suspension of talks.
Carney noted that the US government under Trump would impose, starting at midnight on Friday, a 50% tariff on roughly $28 billion worth of goods and he vowed that Canada would "match those tariffs dollar for dollar to protect our workers and businesses."
With such pain being inflicted on both sides of the border, economist Dean Baker, co-founder of the Center for Economic and Policy Research (CEPR) in Washington, DC, said Americans will not avoid the sting of higher prices on a variety of consumer goods, which he argues should be recognized as a tax imposed by President Trump's chaotic trade policy.
"Trump is going to be hitting American consumers with a new round of tax hikes just over two months before the election," warned Baker.
Peter Armstrong, senior economics reporter for CBC News, said not only would the new tariffs will "very hard" in the sectors targeted and "be catastrophic for some businesses," the additional concern that people must understand is that "the collapse in talks" between the US and Canada "might be even worse" due to the breakdown in trust and the new "injection of uncertainty" between two nations that once stood as solid and reliable trading partners.
With no clear sign about when, how, or if talks would resume, Armstrong warned the risk of tit-for-tat retaliation—a spiraling trade war, in other words—remains high. Armstrong said he texted one business leader in Canada to ask "just how bad" things are and the one-word reply was: "Very."
"The US-Canada trade war is threatening to spiral," commented Bloomberg's Josh Wingrove. "Carney is threatening to match tonight's tariffs dollar-for-dollar; if he does that, a US official is saying Trump will be given options to retaliate again."
Labor union leaders in Canada expressed support for Carney's position, but also lamented the looming negative impact the tariffs would have on Canadian industry and workers. As the Toronto Star reports:
Automotive Parts Manufacturers Association president Flavio Volpe, who sits on Ottawa’s Canada-U.S. advisory council, said that while he did not know any details of what happened, “the prime minister promised Canadians that he would walk away from a bad deal and he kept his word. Canadians will appreciate that.”
Unifor president Lana Payne, another member of the group, said negotiators made the right decision to walk away.
“We can’t trade good jobs for a bad deal, and it was clear the U.S. was continuing to push for untenable concessions,” she said.
However, the Global Automakers of Canada said in a statement it was disappointed the two sides could not come to a deal, claiming the “current trade and tariff environment has already cost the sector over $100 billion.”
Phillips P. O'Brien, a professor of strategic studies at the University of St. Andrews, looked at the situation with Canada and castigated the Trump administration's handling of multiple issues on the geopolitical stage.
"The US decision to launch a trade war against Canada while it is in the midst of a foolish war with Iran, while China is laughing at its weakness, while the deficit is exploding and bond markets are calling BS... shows that the US government is not acting in the US national interest."
According to O'Brien, "The great debate in foreign relations today is whether the US is more untrustworthy or more self destructive in how it is interacting with its former allies." Citing his own confusion on the question, he said, "I can’t make my mind up between them."
