WASHINGTON — The United States imposed 50 percent tariffs on about $20 billion of Canadian goods at 12:01 a.m. Saturday, hours after Prime Minister Mark Carney suspended trade negotiations and vowed to match the levies dollar for dollar.
The duties, applied under Section 338 of the Tariff Act of 1930 — a Depression-era provision that had never before been invoked — turn a monthslong dispute over steel, automobiles and dairy from threat into fact and set the world's largest bilateral trading relationship on course for a new round of retaliation. The two countries exchanged $880 billion of goods and services last year; the new levies hit roughly 5 percent of Canadian exports to the U.S.
The collapse
Talks that had appeared close to a deal on Tuesday, when President Trump paused the same tariffs and posted on social media that the two sides "have a DEAL!", came apart in the final hours before the midnight Friday deadline. Canadian negotiators remained at the U.S. Trade Representative's office past 10:30 p.m. Eastern time before returning to Ottawa.
"Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal," Carney said in a statement minutes before the deadline. He said Canada would introduce new measures in the coming days to support workers and businesses.
U.S. Trade Representative Jamieson Greer put the blame on Ottawa, saying Canada "declined to finalize the trade deal under the terms agreed earlier this week." Greer said Washington had offered "significant tariff reductions on steel, aluminum, autos, and lumber" without providing details. News reports this week had described a framework that would cut tariffs on Canadian steel and aluminum from 50 percent to 25 percent and on Canadian autos from 25 percent to 15 percent, in exchange for Canadian provinces restoring U.S. alcohol to store shelves and Ottawa loosening dairy quotas.
Tuesday's Journal edition noted that Trump had delayed the levy less than two hours before it was first due to take effect, saying documents still needed to be finalized. The three-day extension expired without agreement.
What is hit
The new 50 percent duties apply to wine, dairy, cement, clothing and hockey equipment, according to the U.S. Trade Representative's office. They stack on existing U.S. levies of 50 percent on Canadian steel and aluminum, 25 percent on autos and separate tariffs on lumber, and on a 10 percent baseline duty that has hit most Canadian imports not covered by the United States-Mexico-Canada Agreement.
Calgary-based economist Trevor Tombe estimated in an analysis published Thursday that the new tariffs could cost Canada 90,000 jobs. Financial analysts have projected a hit of 0.3 percent to 0.6 percent of Canadian gross domestic product. Ontario, Quebec and British Columbia are the most exposed provinces.
The Canadian Chamber of Commerce called the outcome "a body blow to North American competitiveness." Its president, Candace Laing, said: "For a small Canadian exporter operating on tight margins, this isn't an abstract trade dispute. It means looking at your orders, your payroll and your employees and asking what you can still afford."
The U.S. Chamber of Commerce warned this week that "higher tariffs would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on" the North American trade pact.
The political test
Carney, who campaigned on an "elbows-up" approach to Washington, had spent the week trying to persuade provincial premiers to lift bans on U.S. alcohol sales that most provinces imposed in early 2025 in retaliation for earlier tariff rounds. The Distilled Spirits Council of the United States said U.S. spirits exports to Canada fell more than 70 percent year over year from March through December 2025.
Ontario Premier Doug Ford, whose auto- and steel-heavy province is among the hardest hit, endorsed the shift on Friday night. "The prime minister has my full support for a strong response—tariff for tariff, dollar for dollar," Ford wrote on X. Manitoba Premier Wab Kinew had earlier said Canada "should fight." Conservative opposition leader Pierre Poilievre said any accord that leaves "one-sided" tariffs on Canadian industry is "a bad deal."
The U.S. view
Greer said retaliation would be met in kind, telling reporters last week that Washington was "not going to tolerate" counter-tariffs and would "take action." He said Canada's continued restrictions on U.S. products, "including, among other things, flat-out prohibitions on certain American goods and services," had blocked a settlement, and noted that only two economies — Canada and China — have retaliated against Trump-era tariffs.
Vice President JD Vance, in leaked audio of a private fundraiser this week reported by the Canadian Press, cast Carney's stance as posturing: "It's hilarious because Carney presents this as some victory for Canada when fundamentally, like, they climb down on a lot of issues."
What is next
Section 338 has never before been used, and lawyers on both sides expect a court challenge; Carney has said unilateral U.S. tariffs violate the USMCA that Trump negotiated in his first term. Ottawa's matching duties take effect immediately, with additional worker and business support to follow "in the coming days," the prime minister's office said. Greer said U.S. negotiators remain available.