Canada was hit with new 50% tariffs on billions of dollars worth of goods Saturday morning, after negotiators failed to finalize a comprehensive trade deal with the U.S. ahead of President Donald Trump’s new deadline.
The tariffs were originally set to kick in Wednesday, but Trump announced a three-day pause to allow the trade talks — which had intensified over the past few weeks after the tariffs were first threatened — to conclude.
While Trump said at the time “we have a deal” with Canada, Canadian officials had been more measured, saying final details and agreement language still needed to be hammered out.
That work had yet to conclude as the tariffs took effect at 12:01 a.m. Eastern Saturday, with negotiators leaving a meeting Friday evening in Washington without a final deal in hand.
Sources have told Global News the U.S. was prepared to lower — but not remove — sectoral tariffs on steel, aluminum and autos under the deal while withdrawing the new 50 per cent tariff order altogether. The deal was also set to include enhanced partnerships in areas including defence, critical minerals and energy.
Canada, meanwhile, would address the three trade irritants cited by Trump for the new tariffs: provincial boycotts of U.S. alcohol, reciprocal tariffs on American autos and auto parts, and tariff-rate quotas for dairy exports under supply management.
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The new tariffs are being imposed under Section 338 of the U.S. Tariff Act, which allows a president to tariff any country that “discriminates” against U.S. commerce.
The office of U.S. Trade Representative Jamieson Greer says nearly US$20 billion worth of Canadian imports will be tariffed, an amount that will “offset” the economic impact of Canada’s “unreasonable and discriminatory” measures.
The imposition of the new tariffs makes the future of the trade deal being hammered out in Washington unclear.
It also puts into question efforts to renegotiate the Canada-U.S.-Mexico Agreement on free trade (CUSMA). Sources have told Global News that Canada was pursuing a three-step framework under the new trade deal that would lead to substantive talks to renew CUSMA, after the U.S. declined to do so at last month’s scheduled review.
Prime Minister Mark Carney has said all options are on the table for responding to the new tariffs, including retaliatory measures. Some premiers, led by Doug Ford in Ontario, have urged Ottawa to fight back with dollar-for-dollar tariffs and to consider blocking certain high-value exports to the U.S., such as energy and critical minerals.
More to come…
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