A proposed trade agreement between the United States and Canada has collapsed, triggering a fresh round of tariffs and deepening tensions between the two major trading partners.
The breakdown came late Friday after negotiators failed to reach a final agreement on the terms of a proposed deal. As a result, the United States is imposing 50 per cent tariffs on about $20 billion worth of Canadian goods, including alcohol, hockey equipment and other products.
US Trade Representative Jamieson Greer said Canada had declined to accept the terms reached during negotiations earlier in the week. He accused Ottawa of introducing new demands and reversing some commitments.
Canadian Prime Minister Mark Carney gave a different account, saying last-minute changes proposed by Washington were unacceptable and made the agreement unworkable.
Carney subsequently suspended the negotiations and directed Canada’s negotiating team to return to Ottawa. He also said Canada would retaliate by matching the new US tariffs dollar for dollar.
The failed agreement followed several days of intensive talks between officials from both countries, with US President Donald Trump and Carney also holding multiple discussions.
Earlier in the week, Trump had announced a temporary suspension of the 50 per cent tariffs after indicating that a deal was close. The proposed agreement would have reduced some US tariffs on Canadian automobiles, steel and aluminium.
In exchange, Canada was expected to remove retaliatory measures and give US companies greater access to its dairy and lumber markets.
Washington had also offered to begin formal discussions with Canada on changes to the United States-Mexico-Canada Agreement, the North American trade pact currently undergoing review.
The collapse has raised concerns among businesses that depend on cross-border trade, particularly manufacturers with integrated supply chains across the United States and Canada.
The automotive sector is expected to be particularly vulnerable, with industry groups warning that higher tariffs could increase costs, disrupt supply chains and weaken the competitiveness of companies operating in North America.
The Canadian Chamber of Commerce also warned that the escalating trade dispute could push up costs for American consumers while damaging Canadian businesses, investment and jobs.
The latest development leaves the two countries facing renewed trade uncertainty, with no immediate agreement in sight and businesses preparing for potentially prolonged tariff pressures.
