Canada vows dollar-for-dollar tariff retaliation, suspends trade talks with U.S.

A last-ditch effort to reach a new trade deal before a midnight tariff deadline failed Friday, as Prime Minister Mark Carney suspended talks with the United States and summoned his negotiators back to Ottawa.

The decision meant new 50 per cent tariffs on billions of dollars in Canadian exports to the U.S. took effect at 12:01 a.m., and Carney vowed Canada would retaliate with equal measures of its own.

“In recent weeks, we made important progress toward improving Canada’s position as having the best deal in the world with the U.S.,” Carney said in a statement just before Trump’s tariff deadline.

“However, that progress has not been enough to meet our objectives for Canadians.”

Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette have been in Washington for nearly two straight weeks trying to get to a deal, including multiple hours of talks with Greer on Friday.

“They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” said Carney. 

“However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”

The new U.S. tariffs target $28 billion in Canadian goods ranging from hockey sticks and honey to essential oils and dairy products.

Details of what goods Canada will tariff in response are not yet available.

Carney also said the government will introduce measures to support Canadian workers and businesses in the coming days. 

U.S. Trade Representative Jamieson Greer said Friday that the U.S. and Canada had “declined” to finalize a tentative agreement, and laid the blame entirely on Canada.

“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days,” said Greer.

“In addition, Canada is continuing to maintain its prolonged retaliation against the United States, including, among other things, flat-out prohibitions on certain American goods and services.”

Greer told reporters the failed deal represented a “missed opportunity,” noting that the U.S. was offering significant tariff reductions on steel, aluminum, autos and lumber in exchange for concessions from Canada. 

He said the deal also included an economic and national security partnership, as well as the announcement of formal U.S.-Mexico-Canada agreement negotiations.

The Trump administration did not extend CUSMA in July. That triggered an annual rolling review of the trade deal for up to a decade, at which point it would expire if all three countries cannot come to an agreement for an extension. 

Mexico and the United States have launched official CUSMA negotiations, but Ottawa and Washington have not started such talks.

Earlier Friday Trump said a deal with Canada was “moving along,” though LeBlanc told reporters there was still “more work to do” to seal a trade deal.

Some of Canada’s premiers have already banded together with Carney following the announcement. 

After days of silence, Ontario Premier Doug Ford said on social media late Friday that the prime minister has his “full support” for a strong response.

“As we fight to protect Canadian sovereignty and economic security, everything needs to be on the table,” said Ford. “Ontario is ready to do its part.”

British Columbia Premier David Eby said on social media that “our politeness should never be mistaken for weakness.”

“We’ll always defend ourselves,” he said. “We didn’t ask for this, but we’ll keep fighting for as long as it takes.”

Former Alberta Premier Jason Kenney also applauded the move, saying on social media that “Canada clearly made a serious, good faith effort to get greater stability and market access, and remains ready to find a fair, balanced agreement.”

‘But we are not cravenly surrendering in the face of constant economic and political aggression,” said Kenney. “Responding to the new U.S. tariffs with counter tariffs is exactly the right thing to do at this time.”

Alberta Premier Danielle Smith, on the other hand, said on social media she is “deeply disappointed” that Canada and the United States have not been able to reach a trade agreement.

“No one benefits from a trade war,” she said. 

Smith also said she welcomed the federal government’s intention to provide relief for those businesses that are impacted.

“Alberta will continue to advocate for a strong tariff-free relationship between Canada and the U.S. and I will be urging the federal government to restart negotiations as soon as possible,” she said. 

Candace Laing, president and CEO of the Canadian Chamber of Commerce and member of the prime minister’s advisory committee on Canada-U.S. economic relations, said in a statement that this will be a “body blow to North American competitiveness in this self-defeating trade saga.”

“A whopping, non-absorbable tariff is not sustainable or viable for business,” she said. “For a small Canadian exporter operating on tight margins, this isn’t an abstract trade dispute. It means looking at your orders, your payroll and your employees and asking what you can still afford.”

Laing said Americans will see their costs go up, while Canadians will see customers, investment and small businesses disappear. 

Trump first threatened the new tariffs in July, and set a deadline of Aug. 19 to reach a deal with Canada on a number of issues. Shortly before that deadline, the president said he was pausing the planned tariffs while the two sides worked out the details of a trade deal.

The U.S. had cited a number of irritants to justify the threatened tariffs, including complaints about U.S. access to Canada’s dairy market and most provinces continuing to keep American alcohol off store shelves. 

Canadian provinces pulled U.S. booze from store shelves last year after Trump imposed tariffs. The bans on U.S. liquor remain in place in all but Saskatchewan and Alberta.

Manitoba Premier Wab Kinew said earlier this week that Carney “effectively” told Canada’s premiers that there would be no deal without a pledge to put U.S. alcohol back on the shelves. 

“I wouldn’t say that he was begging us, but what is a step before begging? So, I get it from his perspective,” Kinew said during a press conference in Winnipeg Thursday.

This report by The Canadian Press was first published Aug. 22, 2026. 

— With files from David Baxter in Ottawa and Kelly Geraldine Malone in Washington

By Catherine Morrison | Copyright 2026, The Canadian Press. All rights reserved.