Canada Prime Minister Mark Carney has rejected the latest US trade proposal after last-minute negotiations between the two countries collapsed, saying Ottawa “cannot accept” what Washington offered. The breakdown has triggered a new escalation in the trade dispute, with the United States imposing 50% tariffs on about $20 billion worth of Canadian goods and Canada preparing retaliatory measures, TOI reported.
Carney said Canada would respond “dollar for dollar” to the new US tariffs, while also suspending the trade negotiations and recalling its negotiating team from Washington. Ottawa said the latest US terms were unfair and economically unacceptable. Who Is Mark Carney? Know All About Former Central Banker Set To Replace Justin Trudeau As Prime Minister of Canada.
Canada PM Mark Carney Speaks on US Tariffs
LIVE: Canada’s response to U.S. tariffs • EN DIRECT : Notre réponse aux droits de douane américains https://t.co/w51zKGOAlq
— Mark Carney (@MarkJCarney) August 22, 2026
Trade Talks Break Down at the Last Minute
The negotiations had intensified in recent weeks as both sides attempted to reach an agreement before the US tariff deadline. Carney said Canada had made progress during the discussions but that the final US proposal did not meet Ottawa's objectives. He said last-minute changes to the American position raised concerns about the reliability of any future agreement.
US Trade Representative Jamieson Greer offered a different account, saying Canada had declined to finalise a deal based on terms that Washington believed had already been agreed upon. The US said it had offered tariff reductions on sectors including steel, aluminium, automobiles and lumber. US Imposes 50% Tariffs on USD 20 Billion of Canadian Goods; Canada Vows Retaliation.
US Imposes 50% Tariffs
The United States' new 50% tariffs took effect early Saturday and cover roughly $20 billion worth of Canadian exports. The measures affect a range of products, including wine, furniture and other manufactured and consumer goods.
The tariffs represent about 5% of Canada's annual exports to the United States, according to reporting by the Associated Press. However, the dispute has broader significance because of the two countries' deeply integrated economies and supply chains.
Canada Announces Retaliatory Measures
Carney said Canada would match the US tariffs on a dollar-for-dollar basis. The new Canadian measures are scheduled to take effect from September 8 and will target a range of US products and sectors.
Steel, dairy, electronics, appliances and agricultural equipment are among the areas expected to face retaliatory tariffs. Ottawa has also indicated that additional support measures will be introduced for Canadian workers and businesses affected by the dispute.
Mark Carney Calls for Greater Economic Diversification
Carney said Canada could not control the changing trade policy coming from Washington but could reduce its economic dependence on the US by strengthening domestic industries and expanding trade with other countries. The Canadian government has said it is working to open new export markets and strengthen existing trade relationships. Carney argued that diversification would give Canadian businesses greater resilience as relations with the US become less predictable.
Washington and Ottawa Blame Each Other
The collapse of the talks has produced conflicting accounts from the two governments. Carney said Washington changed its position at the last minute and that Canada could not accept the terms offered. Greer, meanwhile, accused Canada of making new demands and reversing earlier commitments, arguing that this disrupted an agreement that had been taking shape. The disagreement leaves the future of negotiations uncertain.
Wider Impact on US-Canada Relations
The latest escalation comes as the two countries face growing tensions over tariffs and market access. The trade dispute also raises questions about the future stability of the broader North American trade relationship. Business groups have warned that prolonged tariffs could increase costs, disrupt supply chains and put pressure on companies on both sides of the border.
For Carney, the immediate challenge is to protect Canadian industries from the new tariffs while maintaining access to the US market. For Washington, the dispute adds another layer of uncertainty to trade relations with one of its largest economic partners. For now, negotiations remain suspended, with both countries moving toward retaliatory trade measures rather than a comprehensive agreement.
(The above story first appeared on LatestLY on Aug 22, 2026 10:28 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
