Canada has responded by announcing its own “dollar-for-dollar” retaliatory tariffs, which are set to begin Sept. 8.

US-CANADA TRADE DEAL COLLAPSES AS TRUMP’S 50% TARIFFS GO INTO EFFECT

Carney said the changes to the original agreement were “unfair, uneconomic, and called into question the reliability of any deal.” Among the issues, he said, were changes to an agreement on automobile tariffs and proposed restrictions on Canada’s ability to strike trade deals with other countries.

Carney called the alleged restrictions on Canada’s other trade partnerships “unacceptable.” He also said the U.S. sought to impose restrictions related to Canada’s two official languages, English and French.

The tariffs, first announced in July, use a Great Depression-era law that authorizes the president to issue import taxes of up to 50% on imports from countries that have discriminated against U.S. businesses. To justify the tariffs, Trump has accused Canada of unfairly restricting American products, pointing to trade barriers involving dairy, alcohol, and automobiles.

What is being tariffed?

Last year, Candida exported 72% of its goods to the U.S. The new round of goods taxes applies to roughly $20 billion worth of Canadian goods and covers a wide range of products, including hockey sticks, wine, cement, lumber, and certain apparel and beauty items.

On Monday, Trump announced that tariffs against Canadian cars, trucks, automotive parts, and steel would be increased by 50% on Jan. 1, 2027.

“Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots, and has long created a 60 Billion Dollar Deficit between our two Countries,” the president said in the announcement.

“Not sustainable, and NOT ANYMORE,” he added.

Lumber, in particular, has long been targeted by the U.S. Products used in construction, such as plywood, and tissue used for toilet paper, will also be affected. The lumber industry has already been facing record-high prices, partly due to decreased supply from wildfires and sawmill closures.

Carney has not yet released a detailed list of the Canadian retaliatory tariffs. But he said they could target U.S. steel, dairy, electronics, appliances, agricultural equipment, and pulp and paper.

What is the Trump administration saying?

The Trump administration has indicated that the path toward renewed negotiations remains unclear.

“It’s hard to say.” U.S. Trade Representative Jamieson Greer told Fox News on Saturday. “We don’t have new talks planned with the Canadians. We’re moving forward with measures that respond to Canadian retaliation.”

Greer previously described the trade agreement as a “missed opportunity for Canada, following the deal’s collapse.

“The U.S. offer was also forward looking, and included a historic economic and national security partnership to cooperate on export controls, combat transshipment, enhance digital trade, and align certain external tariffs,” Greer said in the statement. “The offer would have led to supply chain coordination on aerospace, complementary actions to address unfair trade practices, critical minerals cooperation, increased enforcement against imports produced with forced labor, and the announcement of formal U.S.-Mexico-Canada Agreement (USMCA) negotiations.”

Other administration officials have weighed in as well. Transportation Secretary Sean Duffy fired back at Canada on live television Sunday after Carney announced the “dollar-for-dollar” retaliatory tariffs.

Appearing on Fox News Sunday, Duffy called Canada’s decision “foolish” and argued that the U.S. has significantly more economic and military power than its northern neighbor. Canada does, in fact, have a military, although it is substantially smaller than the U.S. military.

Trump, likewise, accused Canada of wanting the “benefits of being a State, without being one,” in a Sunday Truth Social post.

“They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!” the president added. 

How has Canada responded?

Carney held a news conference Saturday to explain Canada’s position and outline his government’s response, in which he described the U.S. tariffs as an attack on Canada.

“We were attacked — like you’re at war when you get attacked. We got attacked,” Carney said.

He announced plans for a domestic aid package to support Canadian businesses affected by the trade conflict. Carney told reporters the assistance could remain in place for the duration of the dispute and possibly beyond the end of the Trump administration.

“We will support these businesses for as long as it takes, in other words, beyond the life of this U.S. administration,” Carney said. “So, there’s various mechanisms that we’ve worked up. We’ll give all the details in a few days.”

Carney’s response has received broad support across Canada’s political spectrum, according to polling conducted after the talks collapsed. One poll found that roughly 3 in 4 Canadians supported his decision to walk away from negotiations, even as many respondents expressed concern about the possible economic consequences.

The trade dispute has also spilled into sports. Fans in Vancouver and Montreal voiced their disapproval of the trade tensions, booing the U.S. national anthem before Major League Soccer matches Saturday.

The dispute represents a major test for Carney, who has argued that middle powers such as Canada must be willing to withstand economic pressure from more powerful countries, such as the U.S. and China.

CARNEY OUTLINES LAST-MINUTE ISSUES WITH US-CANADA TRADE NEGOTIATIONS

“If we’re not at the table, we’re on the menu,” Carney said last year at the World Economic Forum in Davos, Switzerland, as European leaders prepared for new trade measures from Trump.

The outcome of the dispute could shape Carney’s standing at home and abroad, while also offering a test case for how other U.S. allies respond to Trump’s use of tariffs as a negotiating tool.