Canada was “at war” over trade with the US after President Donald Trump “miscalculated” by escalating his tariff attack, Prime Minister Mark Carney said.
Carney delivered a defiant address to the nation on Saturday after suspending trade talks with the US overnight, saying that what the Trump administration had demanded was a “bad deal”.
The collapse of talks ushers in a new wave of tariffs on $20bn worth of Canadian exports on top of existing levies on steel, aluminium, lumber and vehicles.
“You’re at war when you’re attacked, and we got attacked,” Carney told reporters in Ottawa.
President Trump underestimated Canada’s resolve to stomach economic hardship in a “miscalculation” that escalated the trade war, he said.
“We cannot accept what they’ve offered and we will not give what they’ve asked,” he said.
Carney said last-minute changes proposed by the US were unacceptable to Ottawa. Ottawa had made no new demands and was “continually disappointed” by US answers to the issues Trump officials raised as a midnight deadline loomed, he added.
The US president, who casts himself as a master dealmaker, has not yet commented on the trade talks collapse, after saying on Friday afternoon: “we should be able to have a deal with Canada”.
Carney said Ottawa was willing to lift retaliatory tariffs on strategic sectors, particularly steel and aluminium, if the US “substantially lowered” theirs on Canadian companies.
“In exchange for a fair deal, we would encourage our provinces to return US alcohol to the shelves,” he said.
But despite “progress made towards a possible agreement” this week, the US suddenly changed its position, he said.
“They asked too much, and they offered too little,” he said. “It’s a power play.”
Carney listed the numerous concessions Canada made to satisfy the evolving list of US complaints, from issues concerning the fentanyl drug trade to anti-tariff advertisements which had attracted the US president’s ire.
Canada had acted “in good faith to try to find compromise and secure a comprehensive deal in the best interests of both Canadians and Americans,” he said.
Carney said there was “no rationale” for new US demands over the auto industry, adding “that would make the production more uneconomic over time”.
At the eleventh hour, the US also introduced measures to restrict Canada’s ability to seal trade deals with other nations, he said. They raised new concerns over perceived trade barriers due to language provisions in French-speaking Quebec.
As a result, shortly before midnight on Friday, talks collapsed, intensifying the trade war between Trump’s administration and its northern neighbour.
“It was a bad deal,” said Ontario premier Doug Ford on Saturday. “Donald Trump is trying to inflict pain on every Canadian, we will inflict pain right back.”
Canada has sought relief on 50 per cent tariffs on its steel and aluminium sector and 25 per cent on vehicles as well as tariffs and anti-dumping levies on lumber, which over the past 18 months have forced factory closures and job losses.
Carney said Canada would match the fresh US tariffs “dollar for dollar” after the collapse of the talks.
“The new US tariffs are designed to hurt us and divide us, they’re a miscalculation,” he said.
US trade representative Jamieson Greer said on Saturday that it was “hard to say” whether talks with Canada would get back on track.
“We don’t have new talks planned with the Canadians”, he told Fox News. “We’re moving forward with measures that respond to Canadian retaliation.”
Greer told reporters on Friday night it was “a missed opportunity for Canada,” adding their offer was “the best treatment of any major exporter to our market”.
Trump “will be provided with options to level out the playing field” regarding Canada’s retaliation, he said.
Dan Kelly, president of the Canadian Federation of Independent Business, said the impact on small businesses would be immediate and significant.
“A full 40 per cent of small Canadian exporters will be directly hit by these tariffs and nearly one-third expect their revenues will drop by 50 per cent or more as a result,” he said.
Subrata Bhattacharjee, a regulatory and public policy lawyer at Borden Ladner Gervais in Toronto said it was “disappointing” for businesses looking for certainty.
There will be “acute pain” especially in Ontario and Quebec, he said.
“Ottawa was no doubt also measuring strong public sentiment against a deal at all costs and the PM’s messaging clearly reflects this,” he said
Additional reporting by Steff Chávez in Washington
