Canada rejects US trade terms as 'unfair', vows retaliatory tariffs

Canadian Prime Minister Mark Carney announced on Monday that Ottawa has suspended trade negotiations with Washington, rejecting a proposed agreement after US officials presented "last-minute" demands that he described as "unfair" and "uneconomic" and that failed to protect national interests.

Sectoral barriers

The proposed framework included a 4-million-tonne quota on Canadian steel exports coupled with a 25% tariff that would double for any excess volume, according to The Globe and Mail. On automotive trade, US negotiators sought to exempt only American-made content from duties while demanding Canada scrap all retaliatory measures against US steel and vehicles. Washington also insisted that provincial governments "end retaliatory bans on American alcohol" and excluded the forestry sector from coverage despite Ottawa's objections.

Domestic policy targets

US officials targeted internal Canadian policies, demanding an overhaul of the dairy supply-management licensing system and an end to provincial "Buy Canadian" procurement practices. In Quebec, Premier Christine Frechette said Washington pushed for concessions on French-language cultural laws and appliance instruction manuals. The failed deal also linked trade to national security, including Canada's F-35 fighter jet purchase and the "Golden Dome" missile defense system. Carney vowed dollar-for-dollar retaliatory tariffs would take effect on September 8.

Diplomatic breakdown

Mark Wiseman, Canada's ambassador to the United States, told Bloomberg that the collapse resulted from a consistent pattern of discrepancies rather than any single issue. "As we drilled down, what we discovered was that what our understanding of what had been agreed to was quite different from what was showing up in the documents," Wiseman said. Earlier, Carney accused Washington of using tariffs to "hurt and divide" Canada, while US President Donald Trump said on Sunday on Truth Social that Canada "wants the benefits of being a State, without being one."