Prime Minister Mark Carney says trade talks with the United States fell apart at the eleventh hour over last-minute disagreements on how to tariff autos and broader issues of independent Canadian decision-making.
For the past several days, a deal had appeared possible and potentially even likely.
United States President Donald Trump delayed 50 per cent tariffs on billions in Canadian goods by three days, citing progress in trade talks, and even claimed “we have a deal” with Canada.
While the Canadian delegation was more cautious in its assessment, Carney shared details of a potential deal with Canada’s premiers earlier in the week, asking them to start selling American alcohol again as part of the agreement.
But at the last minute, Carney recalled his negotiating team to Ottawa, telling the nation he was “walking away from a bad deal.”
Here are the issues the prime minister said stalled progress on a deal that looked reachable in the not-too-distant past.
As part of his first round of tariffs levied on Canadian goods in 2025, Trump targeted the country’s auto sector with 25 per cent tariffs on vehicles assembled predominantly in Ontario.
The United States president repeatedly told reporters he wanted to see automakers leave Canada and bring their jobs south of the border.
In Ontario, where tens of thousands of direct and spinoff jobs are attached to the sector, unions and the provincial government have worried about keeping auto assembly in Canada.
As part of the abandoned deal with the United States, Carney said there had been progress on an approach to how to integrate autos that ultimately fell apart.
The prime minister said Saturday the two sides disagreed over “the treatment of Canadian content” in vehicles, while the United States was only willing to agree to a trade deal on cars and would not extend it to medium or heavy vehicles like trucks.
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Excluding heavy vehicles from tariff relief, Carney said, would impact plants like Ford Motor in Oakville — which deals with F-series trucks — or General Motors’ Silverado truck in Oshawa.
Carney also said the United States wanted to include terms in the deal that would put limits on the trade deals Canada was able to seek with other countries.
Since tariffs were first levied on Canadian goods, Ottawa has sought new trade deals with countries around the world, positioning itself as a key “middle power.”
Deals with Indonesia and the United Arab Emirates and talks with India are among the agreements Canada has recently reached, with 20 deals touted by the prime minister’s office.
“The U.S. introduced, in the last hours, efforts to restrict our ability to have other trade deals,” Carney said Saturday.
“We believe in free trade; we’re the partner of choice in many respects for countries around the world, and the Americans wanted to restrict that. They had language that they wanted to restrict. Unacceptable.”
Carney later added that there had also been discussion of the United States encouraging Canada to match its tariffs on other countries.
The prime minister said that, if Canada and the United States shared integrated markets on some goods, that approach could make sense. On steel, for example, he said he would see the “merit” of matching American tariffs on other countries if Canada and the U.S. were trading freely.
“If you do that though, you should have an integrated market,” Carney said.
“In other words, the tariff level that you apply from Canada into the United States — because America wants to tariff everybody on everything — but the tariff level you apply should be clearly the lowest. It shouldn’t be the same as other people. It should clearly be the lowest because you have this added market protection.”
The third factor Carney said had derailed trade talks was disagreements over French language rules.
The prime minister offered few details of exactly where the two sides had disagreed but suggested it related, in particular, to French and said those rules would have amounted to a broader attack on Canada.
Later, speaking in French, he said there were “threats” from the United States in the deal over French language and Quebec culture.
Republicans have previously taken aim at Canada’s Online Streaming Act, calling it “discriminatory” and suggesting it should result in additional tariffs.
The Online Streaming Act was passed in 2023 and would empower the Canadian Radio-television and Telecommunications Commission (CRTC) to force large foreign platforms like Netflix and Amazon to pay a portion of their annual Canadian revenues into funds devoted to producing Canadian content.
U.S. streamers and the Motion Picture Association have filed court challenges against the Online Streaming Act, as well as the CRTC’s requirement that those companies disclose financial information in order to ensure the Canadian content funding obligations are met.
The Trump administration also identified the law as a trade irritant ahead of this summer’s scheduled review of CUSMA.
— with files from Global News’ Sean Boynton
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