Canadian Prime Minister Mark Carney has suspended trade negotiations with the United States after rejecting last-minute changes to Washington's proposed terms, describing them as 'unfair' and 'uneconomic' and saying they raised questions about the reliability of any agreement.
The decision came as the US moved to impose 50% tariffs on roughly C$28 billion (about £14.88 billion or $20.39 billion) of Canadian goods. Carney said Canada would respond with dollar-for-dollar tariffs, while preparing additional support for workers and businesses affected by the measures.
Carney said Canada's negotiating goals included tariff-free access for most Canadian businesses, lower US tariffs on strategic industries and protection of Canada's 'flexibility, independence and sovereignty'. However, his statement did not detail all the changes in the US proposal, leaving the specific terms behind the breakdown unclear.
Canada and the US had spent months negotiating a new trade arrangement aimed at providing greater certainty for businesses and maintaining access to the American market.
Carney said there had been important progress in recent weeks, but last-minute changes to the proposed US terms had undermined the negotiations. He described the changes as 'unfair, uneconomic' and said they 'called into question the reliability of any deal'.
He directed Canada's negotiating team to return to Ottawa, saying the government would not accept an agreement 'at any price or on any deadline'.
The US tariffs subsequently took effect, increasing pressure on businesses involved in cross-border trade. Carney said Canada's response would match the measures dollar for dollar, while further support would be provided to affected workers and businesses.
The measures build on nearly C$25 billion (about £13.31 billion or $18.11 billion) in assistance provided by the Canadian government over the previous 18 months, according to Carney.
The breakdown comes as Carney's government seeks to reduce Canada's reliance on the US and expand its trading relationships with other countries.
Carney said Canada was advancing nearly C$500 billion (about £266.20 billion or $362 billion) in major infrastructure projects as part of efforts to strengthen the domestic economy. He also pointed to existing free-trade agreements that provide Canadian businesses with preferential access to about 1.5 billion consumers.
The prime minister said Canada was on track to double that market access by the end of the year, while Canadian exports to non-US markets were expected to double over the next decade.
Carney also said foreign direct investment in Canada was at its highest level in two decades. The figures formed part of his argument that Canada could strengthen its economy while reducing its dependence on the US.
The latest measures add to wider tensions between Ottawa and Washington under US President Donald Trump, with tariffs placing further pressure on one of Canada's most important trading relationships.
Carney's decision does not rule out future discussions with Washington. His statement said Canada remained focused on securing a fair trade agreement, but would continue pursuing its domestic economic strategy and expanding access to international markets.
The negotiations have been suspended as Ottawa prepares its response to the tariffs and additional support for affected workers and businesses. The precise US demands that led Carney to end the latest round of talks have not been fully detailed publicly, leaving the scope for a future agreement uncertain.