Canada will “of course” come to the negotiating table again, but not to be treated like a “subsidiary” of the United States, Prime Minister Mark Carney said on Monday after U.S. President Donald Trump imposed 50 per cent tariffs over the weekend and threatened more on Monday morning.
“An attitude at the negotiation table that Canada is a subsidiary of the United States, that Canadian industry is going to be disadvantaged relative to American industry, that we’re going to set up terms so that over time Canadian industry is going to face constant headwinds – that’s not something we’re going to accept,” Carney said.
Policy makers around the world should “take the lessons” from U.S. President Donald Trump’s escalating trade war against Canada, he added.
“I would just encourage policymakers around the world to take the lesson of what we see today,” Carney said at a press conference in Quebec on Monday.
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What are the diplomatic costs of Trump’s tariff strategy?
“There is a mutually beneficial deal possible here, but it has to be one that respects Canada’s sovereignty, that respects our independence, that uses our complementary strengths to build something better, not tear apart for short term gain. That’s the offer,” Carney added. Trump’s trade war also sends a message to American workers, Carney said.
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“What message does that send to the workers in Michigan, in Ohio and Kentucky, in Alabama, who rely on Canadian demand? We’re their largest customer for automobiles, more than the union European Union, Japan, Korea, many others combined,” he said.
When the U.S. has the “right attitude,” Canada will come to the negotiating table, Carney said.
British Columbia Premier David Eby said the world is watching Canada’s response.
“Other countries are watching Canada’s response, and I hope will be following along. At some point the rest of the world will say: enough,” Eby said in a television interview with CNN.
Trump on Monday aimed his rhetoric on social media at Ontario Premier Doug Ford.
Ford once again threatened to cut off electricity exports to the United States amid the escalating trade war, adding that Trump had declared “economic war against his closest friend and ally.”
In a long social media post on Monday, Trump once again referred to Carney as “governor” – a jibe that is associated with his threats to annex Canada – and attacked Ford.
“Someone should get these clowns to “fall in line” or, the consequences for Canada will be far WORSE!” Trump threatened in his post.
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Premiers back Carney for walking away from trade negotiations
‘Enough is enough,’ minister says
Ottawa is set to unveil details of Canada’s retaliatory tariffs against the United States on Tuesday.
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Canadians wanted their government to say “enough is enough” in trade negotiations with the United States, Finance Minister Francois-Phillipe Champagne said as Canada readies its response to Trump’s wide-ranging 50 per cent tariffs on the Canadian economy that went into effect this weekend after trade talks collapsed.
“Canadians know that at some stage, you have to say enough is enough,” Champagne told reporters on Monday.
Canada will roll out supports to help workers affected by Trump’s trade war maintain employment and “give them a bridge to better days,” Champagne said.
“We have been working on a support package. We have already considered different alternatives. We are prepared,” he said.
Canada’s forestry sector groups welcomed the federal government’s decision to extend support for businesses affected by Trump’s new tariffs.
“We must move swiftly to protect Canadian forest sector employees, businesses, and communities,” said Derek Nighbor, president and CEO of the Forest Products Association of Canada.
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U.S. tariffs are going to be ‘damaging’
The new tariffs imposed by U.S. President Donald Trump could take off between 0.3 to 0.5 per cent off Canada’s GDP, said Deloitte Canada Chief Economist Dawn Desjardins.
“They are going to be damaging,” she said.
Ontario, B.C. and Quebec are likely to go through “significant stress” from Trump’s new tariffs, she added.
Trump’s new tariffs are “a re-intensification of U.S. tariff threats,” a Royal Bank of Canada report on Saturday said.
While most (more than 80 per cent) of Canadian exports to the U.S. would remain tariff-free under the new tariffs, the report said the “unpredictability” of the U.S. administration’s trade policy will make it hard for businesses to plan ahead.
Following the new tariffs, Canada’s effective tariff rate will rise from three per cent to six per cent. While this is still below the average U.S. tariff rate on imports from all countries (around seven per cent), it would no longer be the lowest among major U.S. trade partners, the report said.
The uncertainty is already weighing on Canada’s export sector, said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.
“The tariff at 50 per cent makes it almost uneconomical, especially for small and medium-sized companies, to sell to the U.S.,” he said.
Canada preparing counter-tariffs
After weeks of intense negotiations, with Trump claiming both sides were close to finalizing a “very fair deal,” talks broke down late Friday evening.
New 50 per cent tariffs on $28 billion-worth of Canadian exports went into effect early Saturday morning.
Canada was “walking away from a bad deal,” Carney said in a statement, vowing “dollar-for-dollar” tariffs in response to Trump’s levies, adding that he had asked Canada’s negotiators to return to Ottawa and was suspending trade talks.
“We cannot accept what they’ve offered, and we will not give what they asked,” Carney said in Ottawa on Saturday morning.
The details of Canada’s counter-tariffs will be released “early next week,” Carney said at the time.
Washington responded to Canada’s proposed countermeasures on Monday. The U.S. will increase tariffs on Canadian automobiles and auto parts to 50 per cent on Jan. 1, 2027, Trump said on social media.
“On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!” Trump said.
The Canadian countermeasures will go into effect after the Labour Day long weekend, on Tuesday, Sept. 8, he added.
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“Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Also include products that are currently subject to unjustified section 232 and 338 tariffs,” he said.
Washington “asked too much and offered too little” as negotiations dragged on this week, Carney said.
Carney outlined several outstanding issues that contributed to talks breaking down, including which types of vehicles would be excluded from the ambit of a free trade deal and how much Canadian content in autos could be included.
Carney also pointed to last-minute addition of language that would restrict Canada’s ability to make free trade deals with other counties, as well as an effort to restrict “protections of our language, culture and in effect our sovereignty.”
The Canadian Chamber of Commerce said it is being asked by the government to help ensure that “the supports offered reach the businesses that need it.”
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Canadians united against Trump trade war, support Carney’s decision to end talks
“While we anticipate an eventual path that concludes in a review of CUSMA and constructive discussions on our broader shared interests, it is not in our immediate interest to return to the bargaining table,” said Candace Laing, president and CEO of the Canadian Chamber of Commerce.
Trump took to his preferred social media platform Truth Social, claiming that Canada “wants the benefits of being a State, without being one,” adding that Canada has “charged our great farmers, for many years, massive amounts of Tariffs.”
On Saturday, Carney convened a meeting of Canada’s premiers to discuss “next steps to protect Canadian interests, including dollar for dollar counter-tariffs.”
