Canada halts US trade talks, will match $28B in retaliatory tariffs

Prime Minister Mark Carney has suspended trade negotiations with the United States and recalled Canada’s negotiators to Ottawa, ending an 18-month effort to reach what he called a fair bilateral deal. The breakdown came after late-stage changes to the US terms that Carney characterized as unfair, uneconomic, and damaging to the credibility of any resulting agreement. With Washington set to impose a 50% tariff on roughly $28 billion of Canadian goods at midnight, Ottawa will retaliate in kind, matching the duties dollar for dollar.

Carney framed the move as consistent with a broader strategy of reducing dependence on the US market rather than accepting a deal at any cost. He pointed to nearly $500 billion in domestic infrastructure projects, expanding free-trade access aimed at doubling Canada’s reach to non-US consumers, and foreign investment at a two-decade high. The government also plans new support measures for affected workers and businesses, on top of roughly $25 billion already committed.

The significance extends beyond the two economies: the rupture signals that even close US allies are now being pushed into tit-for-tat tariff regimes, with direct consequences for cross-border supply chains in strategically important sectors. For businesses that had counted on tariff-free integration between the two markets, the collapse introduces immediate cost pressure and lasting uncertainty about the reliability of North American trade arrangements.