Prime Minister Mark Carney said his team walked away from trade negotiations Friday after the American side made unacceptable requests that would have infringed on Canadian sovereignty.
Speaking with reporters Saturday morning on Parliament Hill, Mr. Carney offered several examples of U.S. demands that Canada could not accept, including the fine print related to potential agreements on steel, aluminum and autos, and language that he said would have restricted Canada’s trade negotiations with other countries.
“There were some things we wouldn’t do. We were not prepared to compromise Canada’s sovereignty or to undermine key industries,” he said. “In short, they asked too much, and they offered too little.”
Having failed to complete a deal by the midnight deadline, the U.S. said it was going ahead with new 50-per-cent tariffs on US$20-billion worth of goods.
The Prime Minister said Friday night in a statement that Canada would “match those tariffs dollar for dollar to protect our workers and businesses.”
On Saturday, he spoke to the media and said Canada would soon reveal those retaliatory measures, which will take effect Sept. 8.
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Mr. Carney was asked about the tone of his remarks, which suggested that Canada was at war.
“You are at war when you get attacked. We got attacked,” he said. “That’s fine. We’ve got the reserves. We’ve got resilience. We’ve got the plan. We’ve got the focus. We’ll respond – we are going to focus on what we can control. We are going to build.”
The most difficult part of the negotiations revolved around the auto sector. And in the end, U.S. tariffs on mid- and heavy-duty trucks played a major part in sinking the deal, Mr. Carney said.
As part of the prospective deal, the U.S. had offered to lower tariffs on Canadian autos to 15 per cent from 25 per cent, The Globe and Mail has reported . However, at the last minute, the Americans made clear that this tariff relief would only apply to light vehicles, not to mid- and heavy-duty trucks, Mr. Carney said.
That was “a big change,” Mr. Carney said. “And with respect to Ford’s new plant, for example, in Oakville, which is F350s [trucks], 450s, 550s, they would have been excluded. GM Silverado; same thing, would have been excluded from that. No rationale.”
A source with knowledge of the negotiations said the Canadian side only became aware of the truck exclusion late in the negotiating process. The Globe and Mail is not naming the source because they were not authorized to speak publicly on the issue.
Without tariff relief for trucks, Ford Motor Co.’s decision to invest $5-billion to retool its plant in Oakville, Ont., to produce F-Series trucks would be called into question, the source said. General Motor Co.’s plant in Oshawa, which produces Chevrolet Silverado trucks, would also struggle without tariff relief.
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Mr. Carney also said the two sides disagreed about tariff treatment for Canadian parts and metals in vehicles. Under the current 25-per-cent Sec. 232 tariff on Canadian automobiles, there is a carve-out for the value of U.S. content in the vehicles. Ottawa wanted this extended to Canadian content as well, while the U.S. was reluctant to agree.
A 15-per-cent tariff with only a U.S. content carve-out would have brought the average effective tariff rate on Canadian cars down to about 7.5 per cent, which is still too high to guarantee the long-term sustainability of the Canadian auto industry, according to auto-sector experts. If a Canadian parts carve-out was added, the average effective tariff-rate would have likely fallen to around 5 per cent.
The U.S. was “effectively moving into a series of terms that would have made [Canadian] production more uneconomic over time,” Mr. Carney said.
Mr. Carney met with his cabinet early on Saturday afternoon and held a virtual first ministers’ meeting with provincial and territorial premiers about next steps after the suspension of trade talks, the Prime Minister’s office said in a statement.
Ontario Premier Doug Ford, who had avoided public comments on the talks in recent days, said that the Prime Minister was right to walk away from a bad deal with U.S. President Donald Trump .
“I’m glad he didn’t sign that deal because it was a bad deal,” he said, adding that the U.S. President can’t be trusted. “President Trump is the type of person that would steal your lunch money the first day. He’d steal the tuque off your head the second day and the third day he’d steal your running shoes. He is not to be trusted whatsoever.”
Quebec Premier Christine Fréchette said federal negotiators were right to walk away from a U.S. proposal that would have crossed some of her province’s “red lines,” including removing bilingual labelling regulations and weakening policies that support French culture.
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She said language issues should not be up for negotiation.
“Our culture, our language, is central to our identity,” she said.
Speaking at a news conference with provincial ministers, Ms. Fréchette said the province is preparing support programs for businesses affected by U.S. tariffs and encouraged Ottawa to offer similar measures.
The premier said it isn’t clear whether trade talks between Canada and the U.S. will resume.
Just minutes before the midnight deadline on Friday, U.S. Trade Representative Jamieson Greer announced that Canada had declined to finalize the trade deal under terms he said were agreed to earlier in the week.
Mr. Carney issued a statement shortly after, blaming the American side for introducing “last-minute changes” that were unfair and called into question the reliability of any deal.
Neither side offered specifics Friday night as to what exactly led the talks to fall apart.
Opposition parties expressed support Saturday for the Prime Minister’s decision to walk away from the negotiations.
Conservative Leader Pierre Poilievre released a statement Saturday morning expressing disappointment that the U.S. has chosen to impose further tariffs on Canada.
“Canadians must stand united to defend our country against these unfair attacks on our jobs and businesses. Canada cannot accept one-sided tariffs that will deindustrialize our country. Nor can we accept a bad deal. Instead, we must continue the fight for tariff-free trade,” he said, adding that he will be seeking a call with Mr. Carney.
“Conservatives support action to protect Canadians and our industries targeted by these unfair U.S. tariffs,” he said. “All Canadians must stand united for our workers, our businesses and our country.”
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Bloc Québécois Leader Yves-François Blanchet expressed support for Mr. Carney’s plan to impose countertariffs. He also said in a statement that the federal government should provide support for affected businesses and workers.
NDP Leader Avi Lewis said the Prime Minister was right to walk away from the negotiating table.
“I believe Canadians are united in this crucial moment, on this crucial point: no deal is better than a bad deal,” he said in a statement. “Accepting a deal that would lock in pointless, destructive tariffs and undermine our ability to regulate big tech would have been disastrous for our workers, industries and sovereignty. PM Carney read the room by rejecting the Americans’ offer.”
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