In a nationwide televised address on August 22, Canadian Prime Minister Carney laid out his government’s full position following the breakdown of Canada-US trade talks. He announced that Canada’s equal-value retaliatory tariffs would officially take effect on September 8, in response to Washington’s 50% tariffs on $20 billion worth of Canadian goods.

Carney said the counter-tariffs will span dairy products, steel, home appliances, pulp and paper, and electronics, among other sectors.

Explaining why the negotiations broke down at the last minute, Carney said that while the two sides had come close to a mutually beneficial deal earlier in the week, the US side introduced new terms at the eleventh hour that were economically unviable, unfair, and highly damaging to Canadian interests. These terms reportedly sought to restrict Canada’s ability to strike new trade agreements with other countries, limit its protections for language, culture, and sovereignty, and included highly unreasonable provisions on the automotive industry.

Carney also criticized Washington’s repeated disregard for existing free trade agreements like the USMCA, calling it an extremely bad signal to the international community. When asked why Canada chose to impose retaliatory tariffs, his answer was blunt: “Because we were attacked.”

This summer marked the six-year statutory review point for the US-Mexico-Canada Agreement (USMCA), yet the United States formally refused to automatically renew the pact.

On July 20, US President Trump signed multiple proclamations under Section 338 of the Smoot-Hawley Tariff Act, imposing 50% tariffs on hundreds of specific Canadian imports, including wine, hockey sticks, and cement. The new duties were originally set to take effect on August 19, but Trump announced on August 18 that they would be delayed by three days. Additionally, US tariffs on Canadian steel, aluminum, automobiles, and lumber imposed over the past year remain in place.

According to White House statements cited in media reports, the latest tariff hikes are aimed at responding to what Washington calls discriminatory practices by Canada against American products, and offsetting the burdens and disadvantages those practices impose on US businesses. The proclamations claim that Canada imposes tariffs and quota restrictions on American automobiles while not applying the same limits to other countries. Canada is also said to have used quotas to pressure US automakers into investing in production facilities within Canada. Furthermore, most Canadian regions have halted the purchase, distribution, and retail of American alcoholic beverages, while no similar restrictions apply to other nations.

Just after midnight on August 21, Carney confirmed that Canada had suspended trade talks with the US and recalled its negotiating team.

Carney stated that the progress so far was insufficient to achieve the goals set for Canadians. He reiterated that while the US imposes 50% tariffs on Canadian goods, Canada will respond with tariffs of equal value to protect Canadian workers and businesses.