Canada accuses US of 'trade war' over tariffs
What's the story
Canadian Prime Minister Mark Carney has accused the United States of launching a "trade war" against Canada. The accusation comes after trade negotiations between the two countries broke down on Friday. The breakdown allowed the US to impose 50% tariffs on $20 billion in Canadian goods, affecting about 5% of Canada's annual exports to the US.
Trade terms
Carney rejects US tariff reduction offers
Carney accused US President Donald Trump of proposing "uneconomic" and "unfair" terms that undermined Canada's net benefits.
He said, "We cannot accept what they've offered, and we will not give what they've asked."
The Canadian PM had been ready to remove counter-tariffs on US aluminum, steel, and motor vehicles if the US made substantial reductions.
Retaliatory measures
Canada to impose retaliatory tariffs on American goods
In response to the US tariffs, Carney announced "dollar-for-dollar" retaliatory tariffs on American goods from September 8.
The new Canadian tariffs will notably target the US steel and dairy industries.
Carney said further details would be revealed next week. He vowed to match US tariffs "dollar for dollar" to protect Canadian workers, farmers, families, and businesses.
Trade dispute
US accuses Canada of discriminatory treatment
The US has accused Canada of "discriminatory treatment" against American products.
The Trump administration had offered tariff reductions on key sectors in exchange for concessions from Canada.
However, Carney rejected these offers as unacceptable, saying they asked too much and offered too little.
This trade confrontation has highlighted Canada's economic dependence on the United States, with over 70% of Canadian goods exports going there, according to the Canadian government's State of Trade 2026 report.
Economic impact
Concerns over USMCA amid trade dispute
The trade dispute has raised concerns over the future of the United States-Mexico-Canada Agreement (USMCA).
The collapse of talks has further strained relations between the two countries, with Trump using tariffs to pressure Canada while having repeatedly suggested it could become the 51st US state.
However, Ontario Premier Doug Ford backed Canada's retaliatory move, "tariff for tariff, dollar for dollar," saying "everything needs to be on the table."