US, Aug 22 : The United States will impose tariffs of up to 50% on nearly $20 billion worth of Canadian imports from Saturday after last-minute negotiations between Washington and Ottawa failed to produce a trade agreement, US Trade Representative Jamieson Greer said.
Greer said Canada had declined to finalise an agreement despite receiving an offer that would have given the country more favourable access to the US market. He also accused Ottawa of maintaining retaliatory measures against American products.
A senior Trump administration official said the tariffs, imposed under Section 338 of the Tariff Act of 1930, would take effect at 12:01 a.m. EDT on Saturday. The official said the proposed US terms would have significantly reduced duties and placed Canada in a favourable position compared with other major exporters to the American market.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” Greer said in a statement issued shortly before midnight. He said changes in Canada’s position and new demands had disrupted the balance reached during negotiations.
Canadian Prime Minister Mark Carney disputed Washington’s assessment, saying the United States had made last-minute changes that Canada considered unfair and economically damaging. He also questioned whether such terms could provide a reliable basis for a long-term agreement.
The disagreement followed three days of intensive negotiations in Washington, with both sides attempting to reach an understanding before the tariff deadline. Talks had reportedly made progress on several important issues, including a possible reduction in US duties on Canadian-made vehicles from 25% to 15%.
Negotiators had also discussed lowering tariffs on Canadian steel and aluminium from 50% to 25%. However, significant differences remained over broader trade barriers and exemptions from US tariffs.
Washington has urged Canada to remove measures it considers discriminatory toward American exports. These include restrictions affecting US alcohol, access to Canada’s dairy market and aspects of the automotive sector.
Ottawa, meanwhile, has maintained retaliatory measures introduced in response to earlier US trade restrictions. The issue of additional exemptions from US Section 232 tariffs also remained a major obstacle during the negotiations.
The two countries have highly integrated economies, making the dispute particularly significant for businesses on both sides of the border. The United States and Canada exchanged about $880 billion in goods and services last year.
The Trump administration has defended the new duties as a way to protect American workers, strengthen domestic supply chains and encourage manufacturing investment within the United States. A senior official said Washington did not anticipate Canada responding with further retaliatory tariffs.
The measures originate from President Donald Trump’s July decision to invoke Section 338, a rarely used provision of US trade law that allows the president to impose duties of up to 50% on imports from countries accused of providing unequal or discriminatory treatment to American commerce.
The tariffs were initially scheduled to take effect in July, but the administration granted a three-day pause to provide negotiators with additional time to reach an agreement.
The latest breakdown leaves the two governments without a new round of negotiations scheduled, according to a senior US administration official. Canada had sought further concessions beyond those already offered by Washington, contributing to the collapse of the talks.
Canadian Trade Minister Dominic LeBlanc had acknowledged earlier Friday that negotiators still had significant work ahead as officials attempted to complete an agreement.
The failure to reach a deal could place additional pressure on Canadian exporters and disrupt manufacturing and supply chains across North America. Ottawa may also face growing domestic pressure to consider further measures against US products.
The latest dispute represents another setback in the traditionally close economic relationship between the neighbouring countries, with businesses now facing renewed uncertainty over tariffs, market access and cross-border trade.