News Summary
Carney’s tough response with a dollar-for-dollar reply
- After final efforts to reach a trade agreement between the US and Canada failed, the US imposed a 50% tariff on about $20 billion worth of Canadian imports.
- Canadian Prime Minister Mark Carney announced a dollar-for-dollar retaliatory tariff starting September 8 in response to the US tariffs.
- Carney described the situation as a trade war, criticizing the US for making excessive demands but offering little in return during talks.
September 7, Kathmandu – The final attempt to reach a trade agreement between the United States and Canada has failed, escalating tensions between the two neighboring countries.
Following the breakdown in talks on Friday night, the US immediately imposed a new 50% tariff on approximately $20 billion worth of goods imported from Canada.
This tariff covers about 5% of total Canadian exports to the US. In response, Canada announced it will impose retaliatory tariffs starting September 8.
Canadian Prime Minister Mark Carney addressed the nation on Saturday, declaring a dollar-for-dollar response to the tariffs imposed by the US.
Carney called the US tariffs a “major miscalculation,” accusing them of aiming to economically weaken and divide Canada.
He further stated that a “trade war” situation now exists between the two countries and criticized the US for demanding too much in negotiations while offering very little in exchange.
Carney said Canada will impose retaliatory tariffs on American products such as steel, electronics, dairy products, and household appliances.
The Canadian government also announced plans to introduce additional support measures for workers and businesses affected by the US tariffs. It noted that in the past 18 months, it has already provided approximately 25 billion Canadian dollars in assistance.
Which products face the 50% US tariff?
The new US tariffs apply to roughly $20 billion worth of Canadian imports, including liquor, dairy products, cement, clothing, hockey equipment, select electronics, and paper products.
However, key Canadian exports such as energy, potash, and fish were excluded from the new tariffs. Existing US tariffs on steel, aluminum, automobiles, and wood products remain unchanged.
Negotiations collapse at the last moment
Serious trade negotiations between the US and Canada have been ongoing for several weeks. On August 18, Carney expressed optimism about significant progress in talks. At that time, the US postponed the planned 50% tariffs until August 21.
However, the two sides failed to reach an agreement during the final phase.
Canada accused the US of imposing unfair and additional conditions in the final negotiation stages. Canadian officials claim that US proposals included restrictions on Canada’s ability to form new trade agreements with other countries and adverse provisions related to medium and heavy truck trade.
The US has defended its new tariffs by alleging that Canada discriminates against American products.
Severe blow to US-Canada trade relations
The US and Canada have long been close economic and political partners. Since Donald Trump’s administration began, tariff-related tensions between the two countries have steadily increased.
Since 2025, following US imposition of additional tariffs on steel, aluminum, automobiles, and other sectors, Canada has taken reciprocal measures.
The new 50% tariffs have further complicated bilateral trade relations. Analysts warn that if this dispute persists, it could adversely affect cross-border trade, industries, and consumer prices.
Carney emphasized Canada’s intention to reduce its dependence on the US and expand trade relations with other countries, noting that Canada has already advanced more than 20 new economic and security partnerships.
US President Donald Trump has not yet publicly responded to Carney’s recent statement following the failed negotiations.
There is currently no clear timeline for renewed trade talks between the US and Canada. Consequently, uncertainty has increased over the future direction of relations between these two major North American trade partners.
