A tentative trade deal between Canada and the U.S. collapsed less than an hour before a late Friday deadline, triggering the imposition of President Donald Trump’s latest round of 50-per cent-tariffs on $28-billion of Canadian exports, a vow of “dollar-for-dollar” retaliation by Prime Minister Mark Carney and an abrupt escalation in the continental trade war.
asserted
deal → collapse → war
Mr. Trump and Mr. Carney had reached a deal earlier in the week, causing the President to put his new tariffs on hold until 12.01 a.m. Saturday while the two sides finalized details.
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sides → reach → details
But Mr. Carney said the U.S. tried to change the deal, so he broke off the talks and recalled Canadian negotiators.
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he → say → negotiators
“Last-minute changes in the U.S. proposed terms were unfair, uneconomic and called into question the reliability of any deal,” the Prime Minister said in a statement.
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Minister → propose → statement
On Mr. Trump’s new levies, he added, “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
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Canada → add → workers
U.S. Trade Representative Jamieson Greer told reporters on a conference call late Friday that it was Canada that caused the deal to fall apart by asking for more.
“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days,” he said.
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he → tell → days
In addition to trade matters, Mr. Greer said, the deal had been set to include national security, critical minerals and aerospace coordination provisions.
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deal → say → security
If Canada follows through on its threat to retaliate, one U.S. official said, Mr. Trump will be given options to hit back.
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Trump → follow → options
The Globe and Mail agreed not to identify the official as a condition of participating in a briefing on the talks.
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Globe → agree → talks
Canadian negotiators, led by Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette, spent much of Friday afternoon and evening hunkered down with Mr. Greer at his office by the White House.
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negotiators → lead → House
Marc-André Blanchard, the Prime Minister’s chief of staff, and Mark Wiseman, Canada’s ambassador to Washington, joined the group for the second straight day.
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Blanchard → join → day
In on-and-off talks over the past year, Canada had sought relief from Mr. Trump’s tariffs of 50 per cent on steel and aluminum, 25 per cent on autos, 10 to 25 per cent on forestry products, and several other sectoral levies.
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Canada → seek → products
The negotiations kicked into high gear this past month after the U.S., threatened the new levies, which target electronics, alcohol, dairy and numerous other products.
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which → kick → electronics
The Trump administration believed Canada was stalling for time in hopes that a weakening President – amid the Iran war and looming congressional elections – would agree to a better deal.
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President → believe → deal
The proposed deal revolved around a trade-off: Canada accepting some level of tariffs from Mr. Trump, and conceding on a long list of U.S. trade demands, in exchange for the President lowering those tariffs and not imposing new ones.
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President → propose → ones
Among other things, the U.S. demanded that Canada stop its retaliatory tariffs against American autos, change how licences are allocated under the dairy supply-management system, and have provincial governments end retaliatory bans on American alcohol and Buy Canadian procurement practices.
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governments → demand → practices
U.S. negotiators, The Globe and Mail has reported, also raised defence and security issues in the talks, such as Canada’s long-delayed F35 fighter jet purchase, critical minerals, the Golden Dome missile defence system and oil exports.
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Globe → report → purchase
The U.S. official said Friday that the deal ultimately collapsed because Canada wanted more relief on the sectoral tariffs than the U.S. was willing to give.
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U.S. → say → tariffs
The official said that, in the end, it came down to just one or two of the tariffed sectors.
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it → say → sectors
In recent days, sources with knowledge of the negotiations pointed to a number of sticking points.
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sources → point → points
The U.S., for instance, wanted to exempt from tariffs only the value of American-made content in Canadian cars, while Canada wanted an exemption for Canadian and Mexican content, too.
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Canada → want → content
On forestry, meanwhile, U.S. negotiators did not want the sector covered by the deal, while Canada insisted that it had to be.
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it → want → deal
The deal under discussion for steel was particularly harsh, the sources said: it would have obliged Canada to accept both a four-million-tonne quota on exports to the U.S. and a tariff of 25 per cent on steel within that quota.
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it → say → quota
In addition, Canada would have had to remove all of its counter-tariffs on U.S. steel.
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Canada → have → steel
One source pointed to another potential factor in recent days.
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source → point → days
Commerce Secretary Howard Lutnick, who became directly involved in the talks earlier this week, wanted a tougher deal with Canada, the source said.
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source → become → Canada
Mr. Trump’s latest tariffs will hit around 5 per cent of Canadian exports to the United States, which means the immediate economic impact will be relatively small.
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impact → hit → States
Royal Bank of Canada economists pegged the impact of the new Sec. 338 tariffs at 0.4 per cent of GDP, while Capital Economics estimated the fallout at 0.6 per cent.
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Economics → peg → cent
However, the tariffs will hammer certain Canadian manufacturing industries, including electronics, plastics, paper products, furniture and home appliances.
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tariffs → hammer → electronics
RBC estimates that upwards of 20 per cent of production and jobs in the electronics and apparel industry in Canada could be impacted by the new U.S. tariffs.
uncertain
cent → estimate → tariffs
The tariffs also won’t impact all regions of the country equally, with Ontario, Quebec and British Columbia hit the hardest, and Alberta and Saskatchewan emerging largely unscathed.
“This will be a body blow to North American competitiveness in this self-defeating trade saga.
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This → impact → saga
A whopping, non-absorbable tariff is not sustainable or viable for business,” Candace Laing, CEO of the Canadian Chamber of Commerce said in a statement late Friday.
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Laing → say → statement
“Americans will see their costs go up, and Canadians will see customers, investment and small businesses disappear.”
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customers → see → ?
Ontario Premier Doug Ford, who had avoided all public comment this week, said he was behind Mr. Carney’s plans for retaliation.
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he → avoid → retaliation
“Team Canada needs to stand together more united than ever before,” he said in a post on social media.
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he → need → media
“The prime minister has my full support for a strong response - tariff for tariff, dollar for dollar.
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minister → have → dollar
As we fight to protect Canadian sovereignty and economic security, everything needs to be on the table.”
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everything → fight → table
Mr. Ford, whose anti-tariff ad last October caused Mr. Trump to end a previous round of negotiations, was emblematic of another difficulty Mr. Carney faced in landing a deal: He needed the premiers to co-operate on ending their alcohol and procurement retaliations despite a potential deal that would have hammered some of their provinces.
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that → cause → provinces
More of Canada’s premiers banded together with Carney following the announcement.
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More → band → announcement
British Columbia Premier David Eby said on social media that “our politeness should never be mistaken for weakness.”
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politeness → say → weakness
…and 18 more, not listed.
The Aporia
