Canada will put matching tariffs on United States goods from the Tuesday after Labour Day, 8 September, after Prime Minister Mark Carney suspended trade negotiations with Washington on 21 August and ordered his negotiators home.
In a statement issued in Ottawa that day, Carney said the United States intended to impose a 50 per cent tariff on roughly $28 billion of Canadian goods at midnight. "Canada will match those tariffs dollar for dollar to protect our workers and businesses," he said. The Canadian list covers steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, and sits on top of tariffs Canada already has in place.
What broke the talks is more specific than a disagreement about rates. Setting out his account the next day, Carney said the United States had put new terms on the table late in the process that were "uneconomic, unfair", and that "they asked too much and offered too little".
Three of those terms went beyond tariffs. Washington declined to extend any relief on vehicle tariffs to medium and heavy vehicles, which Carney said would make building them in Canada progressively uneconomic. It sought to limit Canada's ability to negotiate trade agreements with other countries, and pressed Canada to apply American tariff levels to third countries. It also sought changes to Canada's French language and cultural protections.
Carney said he was "not prepared to compromise Canada's sovereignty or undermine our key industries", and "not prepared to compromise on the protection of the French language and our culture". Canada had been willing to drop its remaining retaliation on steel, aluminium and autos if Washington lowered its own tariffs.
United States President Donald Trump answered on Sunday, saying Canada wanted "the benefits of being a State, without being one".
The second of those three conditions is the one with reach beyond North America. A trade agreement that restricts what its signatory may agree with anyone else, and that requires the smaller party to adopt the larger one's tariff schedule against third countries, changes what a bilateral deal is. It transfers part of a country's external trade policy to its counterpart.
That is not an abstract question for Australia. Australian exports to the United States have carried a 12.5 per cent tariff since 23 July, when the Office of the United States Trade Representative issued its final determination against 60 economies examined over goods made with forced labour. Australia was one of 38 economies given that rate, up from the 10 per cent baseline it had been paying.
Anthony Albanese raised it directly with Trump in a phone call on 14 August, his first with the President since March, asking for a full exemption or at least no further increase. The President agreed to consider the request. No decision has been announced.
Canada has a signed agreement covering most of its trade with the United States. The terms it was asked to accept late in this negotiation went to its cultural policy and to its freedom to deal with third countries.
Carney announced $25 billion in support for Canadian workers and businesses affected by the American tariffs, building on assistance already provided over the past 18 months. The United States tariffs are in force now. Canada's take effect on 8 September, and negotiations remain suspended.
