Trade talks collapse

Negotiations between Canada and the United States broke down late Friday in Washington, triggering new 50-percent US tariffs on about $20 billion worth of Canadian goods—roughly 5.5 percent of Canada's exports to its southern neighbor, as reported by multiple outlets including ABC Australia, Dawn, and Deutsche Welle. The tariffs took effect Saturday and cover a wide range of products, from hockey sticks to cement, according to several sources.

Prime Minister Mark Carney announced retaliatory measures on Saturday, saying Canada would match Washington's tariffs "dollar for dollar" to protect Canadian workers, farmers, families, and businesses. Speaking in Ottawa, Carney said: "You're at war when you get attacked. We got attacked." He added that the United States had proposed new terms that were "uneconomic, unfair and undermined the net benefits for Canada."

Canadian counter-tariffs will target US steel and dairy industries, as well as household appliances, farming equipment, electronics, and pulp and paper, with duties set to take effect on September 8. Carney said more details would be released in the coming days.

Trump responds

US President Donald Trump hit back on Sunday in a post on Truth Social, writing: "Canada wants the benefits of being a State, without being one!!!" He added: "They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!" This is not the first time Trump has made references to Canada becoming the 51st state, a point noted by several outlets.

Earlier, Trump had expressed optimism about reaching a deal, citing his "good relationship" with Carney. But on Saturday, Carney said the conditions set by the US were unacceptable even though earlier talks had been positive.

US Trade Representative Jamieson Greer told the New York Times that the US had offered to reduce tariffs on steel, aluminum, and autos, as well as eliminate a recently imposed tariff on Canadian lumber. Greer said those measures would have given Canada "the most preferential treatment of any trading partner." However, he told Fox News that Washington was "moving forward with measures that respond to Canadian retaliation" and that no new talks were planned.

US officials warn of 'devastating' impact

US Transportation Secretary Sean Duffy warned on Sunday that Canada would be "foolish" to think it could win a trade war with the United States, predicting a "devastating" impact on its northern neighbor. Appearing on "Fox News Sunday," Duffy said: "We're great trading partners, right? But Canada gets the benefit of trading with the US way more than the US gets the benefit of trading with Canada." He added: "To think that they're going to go to war with Donald Trump and actually win that war with the US, I think it's foolish on their part."

Duffy also claimed that Canada "doesn't have a military," a statement that drew attention because Canada does have a military, though much smaller than the US's. The Washington Examiner noted the factual error in its report.

The United States accounts for roughly 70 percent of Canadian exports, a statistic cited by multiple sources to underscore Canada's economic dependence on its southern neighbor. Canada is also the second-largest US goods export market, behind Mexico.

Domestic pressure in Canada

The Conservative Party is calling on the federal government to release the full details of the proposed trade deal that Canada rejected. In a letter to Trade Minister Dominic LeBlanc, Conservative MP Shuvaloy Majumdar said his party supports the decision to reject the deal but that Parliament is in the dark on what was on the table. "If there was a draft text of any agreement that both governments have seen, please release it. The US administration has seen it. Your government has seen it. Canadians deserve to see it," Majumdar wrote.

Majumdar said he is not asking for "negotiating secrets" but rather information that both governments already know. The Bloc Québécois stopped short of supporting the call for public release but reiterated its request for a briefing for party leaders. Green Party Leader Elizabeth May also said party leaders should be briefed, though she did not demand the details be made public.

Prime Minister Carney has said Canadian negotiators walked away after the US made unacceptable demands, including efforts to restrict Canada's ability to strike trade deals with other countries and a last-minute change on truck exports.

Ontario Premier Doug Ford, meanwhile, has called for additional retaliatory tariffs on imports from eight US states—Alabama, Arkansas, Florida, Iowa, Missouri, Montana, Texas, and Wisconsin—describing them as "politically significant states to the current administration's base of support." Ford has also been quoted as saying of Trump: "He can kiss my ass as far as I'm concerned."

British Columbia Premier David Eby said: "We will never be the 51st state."

US domestic opposition

Some US politicians are criticizing the Trump administration's escalating trade war, including at least one Republican. Former Vice President Mike Pence told CNN's State of the Union on Sunday: "I think the last thing we need right now as our economy is getting back on its feet is a trade war with Canada." Pence, speaking from Kyiv to mark the 35th anniversary of Ukraine's independence, acknowledged "hot rhetoric" from both leaders and said he hoped for negotiation rather than confrontation.

American business groups have also raised concerns about further escalation, warning that tariffs could increase costs for consumers and urging both countries to return to the negotiating table, as reported by CP24.

Auto tariffs and other threats

President Trump has announced plans to raise tariffs on Canadian autos to 50 percent starting January 1. Currently, the auto tariff sits at 25 percent and applies only to non-US content inside finished vehicles; auto parts cross the border tariff-free, a detail reported by Times Now.

Carney has said Trump wants to gut Canada's steel, aluminum, and autos industries, adding: "There is a mutually beneficial deal possible here, but it has to be one that respects Canada's sovereignty." He has also indicated that Canada was prepared to remove its own counter-tariffs on US aluminum, steel, and motor vehicles if Washington substantially reduced its levies, and was willing to encourage provinces to resume sales of American alcohol.

A report cited by CP24 suggests around 87,000 Canadian jobs could be at risk from the ongoing trade war. Trump is using Section 338 of the US Tariff Act to impose his tariffs, accusing Canada of "discriminatory treatment of American products."

Looking ahead

Canada is expected to announce the specifics of its retaliatory tariffs on Tuesday, according to sources cited by CTV News. Finance Minister François-Philippe Champagne and Jobs Minister Patty Hajdu are among four ministers expected to present the measures. One source told CTV News the federal government will also announce an expansion of Employment Insurance to help workers affected by US tariffs.

Carney has said the trade war marks a fundamental change in Canada's relationship with the United States. "We've recognised from the start that America has changed," he said. "We're not going back to the old relationship."