Canada will announce retaliatory tariffs on U.S. goods later on Tuesday, the country’s trade minister said, after negotiations between Ottawa and Washington collapsed last week. Dominic LeBlanc, Canada’s minister responsible for U.S. trade, told CNBC on Tuesday that the government intends to proceed with countermeasures in response to Washington’s escalating tariff threats.
The breakdown in talks came after President Donald Trump threatened to raise U.S. tariffs on all Canadian cars, trucks and automotive parts to 50% starting January 1, 2027. Under the proposed trade agreement that collapsed on Friday, the top-line tariff rate on Canadian cars and light-duty trucks would have been reduced from 25% to 15%, while tariffs on aluminum and steel would have been cut from 50% to 25%. Disagreements over whether U.S. tariff relief would extend to medium- or heavy-duty trucks were cited as a key reason for the failure to reach a deal.
LeBlanc said Ottawa had warned Washington that failure to secure an agreement would prompt Canada to take steps to protect key sectors. "We said that if we didn't get to a deal, we would have to take the steps that any responsible government would take to protect those sectors of the economy," he told CNBC. "Our preference was not to do that." The timing of the retaliatory measures aligns with the Trump administration’s escalation, which LeBlanc described as the government’s intention during the interview.
