Top News

Canada has suspended trade negotiations with the United States after last-ditch talks failed to resolve the latest strain in relations between the two countries, with Prime Minister Mark Carney describing changes to Washington’s proposed terms as “unfair” and “uneconomic”.

The United States was set to impose 50% tariffs on $20 billion worth of Canadian products early Saturday after the negotiations failed to produce an agreement.

The tariffs are expected to affect about 5% of what Canada ships to the US each year, including products such as hockey sticks and tongue depressors.

Carney Calls US Terms ‘Unfair, Uneconomic’

Carney said the latest changes proposed by the US had disrupted negotiations and raised questions over the reliability of any eventual agreement.

“Last-minute changes in the US-proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”

Carney said his government would announce additional support for Canadian workers and businesses in the coming days.

My statement on Canada-U.S. trade negotiations: pic.twitter.com/65OuQH40ra

— Mark Carney (@MarkJCarney) August 22, 2026

US Trade Representative Jamieson Greer, meanwhile, said Canada had declined to finalise the trade agreement under terms agreed earlier in the week.

“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the US 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,” Greer said in a statement read to reporters on a press call shortly before midnight.

Greer described the US proposal as “forward-looking” and said it included “a historic economic and national security partnership.”

Tariff Deadline Extended, But No Deal

The tariffs were initially scheduled to take effect at 12:01 am Wednesday. However, US President Donald Trump extended the deadline by three days to allow negotiations to continue.

Despite the additional time, the two sides failed to reach an agreement.

The US and Canada have had disagreements over trade for decades, including disputes involving Canadian softwood lumber imports and US access to Canada's protected dairy market.

Despite these differences, the two countries have remained friends, allies and trading partners. Canadian soldiers fought alongside American troops in Afghanistan after 9/11.

The 5,525-mile US-Canada border is undefended, while nearly 330,000 people and $2 billion worth of goods cross it every day. Around 800,000 Canadians live in the United States.

Trump’s Approach Marks Shift In Relations

Trump's approach towards Canada represents a major departure from the traditionally cooperative relationship between the two countries.

Trump has imposed tariffs on Canadian goods as part of efforts to bring manufacturing back to the United States and has repeatedly made comments about turning Canada into America's 51st state.

The Canadian public has also expressed growing opposition. A petition seeking the expulsion of US Ambassador Pete Hoekstra, a Trump ally, had collected nearly 248,000 signatures since July 21.

The petition accuses Hoekstra of having “normalized'' Trump's talk of annexing Canada, among other things.

Canada Heavily Dependent On US Market

Nearly 72% of Canada's goods exports last year went to the United States.

The political impact of the latest breakdown in negotiations could be larger than the immediate economic fallout, with the two countries having exchanged $880 billion worth of goods and services last year.

The Trump administration could also face pressure over imposing a major new tariff ahead of November's midterm elections, as US importers pay the tariffs and may pass the additional costs on to consumers through higher prices.

American voters are already frustrated with the high cost of living.