Trade negotiations between the United States and Canada collapsed late Friday night, leading to the immediate imposition of steep 50% tariffs on a wide range of Canadian goods. The duties took effect at midnight, according to the U.S. Trade Representative’s office, which estimated the tariffs would affect about $20 billion worth of U.S. imports from Canada.

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Canadian Prime Minister Mark Carney announced the suspension of talks minutes before the deadline, stating that while significant progress had been made, it was insufficient to meet Canada’s objectives. He directed Canadian negotiators to return to Ottawa. Carney said Canada would retaliate by matching the U.S. tariffs dollar for dollar to protect Canadian workers and businesses.

The breakdown followed nearly two weeks of intense negotiations and marked a sharp reversal from Tuesday, when President Donald Trump, the current President of the United States, had paused the tariffs for three days and indicated a deal had been reached. Officials on both sides had expressed optimism as recently as Thursday, when Canadian minister Dominic LeBlanc met with U.S. Trade Representative Jamieson Greer for several hours. LeBlanc told reporters that the two sides were very close and would continue working until an agreement was reached.

Talks continued into Friday evening, with officials remaining at the U.S. Trade Representative’s office past 10:30 p.m. Eastern Time, but no compromise was achieved. In his statement, Carney cited last-minute changes in the U.S. proposed terms as unfair and uneconomic, questioning the reliability of any deal. He emphasized that Canada would not return to its old relationship with the U.S. and would not allow any nation to determine its future.

Greer responded early Saturday, saying Canada had declined to finalize the trade deal under terms agreed earlier in the week. He noted that despite the U.S. offer of the best treatment for any major exporter to the American market, new demands and walk-backs by Canada had disrupted the balance reached in previous days.

Source: IndexBox Market Intelligence Platform