A hefty new tariff on a big selection of merchandise from Canada took impact early Saturday after last-minute negotiations to avert the duties collapsed.

“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,” US Trade Representative Jamieson Greer advised reporters.

“New demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days,” he added.

Canada is one of the only nations that retaliated against Trump’s tariffs last 12 months. Getty Images

The 50% tariff will apply to some $20 billion price of Canadian merchandise, including wine, hockey sticks, and cement. 

Canadian Prime Minister Mark Carney vowed swift retaliation after negotiations failed. 

“Canada will match those tariffs dollar for dollar to protect our workers and businesses,” he said in a assertion. 

“In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly $25 billion in support provided over the past 18 months,” Carney added. 

President Trump had initially set a 12:01 a.m. Wednesday deadline for the two sides to attain phrases to stave off the tariff but pushed it back to Saturday amid constructive, eleventh-hour negotiations.

The new tax goals to treatment Canada’s “substantial retaliation” and “discrimination” against American merchandise and companies, according to Trump administration officers. 

There will be exemptions for vitality and important items like fish and vital minerals. 

President Donald Trump meets with Canadian Prime Minister Mark Carney in the Oval Office at the White House on May 6, 2025. Getty Images

“We have recognised from the beginning that America has changed, and that we will not return to our old relationship,” Carney’ assertion continued. “Our government understood, before many, that America is altering all its trade relationships. Putting tariffs on its closest allies and charging for access to its vast market.”

The prime minister blamed “last-minute changes in the US proposed terms” that he described as “unfair, uneconomic, and called into question the reliability of any deal” for the breakdown in talks. 

In the hours main up to the implementation deadline, Trump appeared optimistic that a deal could be finalized with Canada, touting his “good relationship” with Carney.

“The deal with Canada is moving along and we should be able to have a deal,” Trump advised reporters at Joint Base Andrews, before jetting off to a rally in South Carolina.

After teasing that his administration is “starting on a new deal with Mexico” at the same time it negotiates with Canada, Trump declared: “I only make good deals. Much better deal for the United States, both with Canada and Mexico.”

President Donald Trump speaks with Canadian Prime Minister Mark Carney at a working lunch with leaders of G7 and the Middle East in Evian-les-Bains, France, on June 16, 2026. Evelyn Hockstein/Pool Reuters via AP

The tariff was unveiled last month, shortly after Trump and Carney were noticed chatting during the World Cup last in New Jersey. 

The two leaders spoke by telephone Monday afternoon and mentioned a potential commerce deal. 

″We are negotiating,” Carney said of talks with Trump, according to the Associated Press. “The negotiations are very intense and delicate. This is not the time to talk about negotiations in public.”

The Trump administration was reportedly pushing for Canada to finish retaliatory measures it took against Trump’s tariffs last 12 months, including bans on US liquor and duties on US vehicles. 

When he announced the implementation delay on Wednesday, Trump also teased that an settlement to resurrect the dormant Keystone XL pipeline mission may also be half of a last deal.

“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” the president wrote on Truth Social.

A truck passes over the Peace Bridge from Buffalo, New York, into Canada on Aug. 18, 2026. AFP via Getty Images

Meanwhile, Canada has pressed the US to decrease tariffs on vehicles and other items, according to Politico.

Ottawa needs the US tariff on Canadian-built automobiles minimize to 15% from 25% and the levy on Canadian metal and ⁠aluminum halved to 25%, Reuters reported.

“We have more work to do. We are going to continue working up until the last minute. Our job is not finished,” Canada’s Minister of Internal Trade Dominic LeBlanc said Friday as he emerged from Greer’s workplace, just 4 hours before the deadline.

LeBlanc’s workplace confided ​with Carney’s US financial advisory group earlier Friday that talks were “complex and consequential,” in an e-mail obtained by Reuters.

“I want to ​be direct with you about where we stand. This is an intense moment. The stakes are significant… That pressure is being felt by Canadians across the country, and those at the table ‌are acutely ⁠aware of it,” the e-mail learn.

Canada is the second-largest US commerce associate. Nearly 72% of Canada’s items exports last 12 months went to the US.

However, the US items commerce deficit with Canada was $46.4 billion in 2025, according to the Office of the US Trade Representative.

Last 12 months, Trump imposed sweeping, double-digit tariffs on nearly every nation after declaring the US commerce deficit a nationwide emergency. 

In February, the Supreme Court struck down the so-called “Liberation Day” tariffs, ruling the president did not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose them. 

For the newest spherical of levies against Canada, Trump invoked Section 338 of the Tariff Act of 1930 – a Great Depression-era legislation that has never been used. 

Section 338 authorizes the commander-in-chief to impose tariffs of up to 50% on imports from international locations that have discriminated against US companies. No commerce investigation is required and there is no time restrict on how lengthy the tariffs can keep in place under Section 338.

Trump has claimed that Canada discriminates against American exports of automobiles, alcohol and cheese. Canada and China were the only international locations that issued retaliatory tariffs against the US in response to Trump’s levies last 12 months. 

“If a country retaliates against us, we’re obviously not going to tolerate that,” Greer, the US commerce rep, said last week. “We’ll take action. My sense is the Canadians, they want to have a more conciliatory approach, but we’ll see.”