The tariffs came into effect shortly after midnight on Saturday, covering around $20 billion worth of Canadian imports, including products such as wooden hockey sticks. The affected goods account for just over 5% of Canada’s exports to the United States.
While the tariffs are not expected to have a major impact on the overall US economy, they mark a fresh escalation in trade tensions between US President Donald Trump and Canadian Prime Minister Mark Carney.
The move could also complicate broader negotiations aimed at renewing the United States-Mexico-Canada free trade agreement.
Carney said Canada had suspended trade negotiations with Washington and would respond to the new tariffs with equivalent measures.
“I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Carney said in a statement.
He said last-minute changes to the US proposal were unfair and economically damaging and raised questions about the reliability of any potential agreement.
The latest development came only hours after the two sides appeared close to a deal. Sources said the proposed agreement could have reduced tariffs on Canadian steel, aluminum and automobiles and potentially allowed American alcohol products to return to Canadian liquor stores.
However, US Trade Representative Jamieson Greer said Canada had declined to finalize the deal.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” Greer said at a White House briefing.
A senior Trump administration official said the US offer would have given Canada the most favorable tariff position among major exporters to the United States. However, the official said Ottawa had sought further concessions, particularly on steel, aluminum, automobiles and softwood lumber.
No further talks have been scheduled as the new tariffs take effect.
The Trump administration had already threatened additional tariffs on a wide range of Canadian products, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.
Trade experts have warned that the new duties could put vulnerable Canadian industries under severe pressure, potentially resulting in job losses and business closures.
The latest tariffs follow three days of negotiations in Washington between Canadian Trade Minister Dominic LeBlanc and Greer.
They also come on top of existing US tariffs on Canadian steel, lumber and automobiles, sectors that have already faced significant pressure over the past 18 months.
The latest escalation could further strain economic relations between the two countries and make future efforts to resolve their wider trade dispute more difficult.
