Canada Trade Talks Collapse; 50% Tariffs Hit

U.S.-Canada trade talks collapsed late Friday, and Washington answered on Saturday with a 50% tariff on about $20 billion of Canadian goods — dairy, wine, wood products, furniture, cement and ceramics among them.

Both capitals say the other side blew it up.

Canada's ambassador to the U.S., Mark Wiseman, says the written deal text kept contradicting what Ottawa thought it had agreed to. U.S. Trade Representative Jamieson Greer says Canada came back for more in the final hours.

The Two Accounts

Wiseman, Prime Minister Mark Carney's top envoy in Washington, said in an interview Sunday that no single issue killed the deal. He likened it to a handshake agreement to buy a house — only to learn the appliances weren't included, the furnace had no warranty, and neither the garage nor the yard was on the property.

"As we drilled down, what we discovered was that what our understanding of what had been agreed to was quite different from what was showing up in the documents," he said. "When that kind of happens once or twice, it's kind of understandable, but when it happens consistently, and every interpretation is the most negative interpretation" it "got to a point" where Canada walked.

Greer told CNBC the talks had reached a point "where we had enough agreement among the parties to announce" a deal. "Then we set about to finalize it, and then in the last hours, I think there were things that the Canadians just — you know, they wanted more," he said.

Greer told the New York Times on Saturday what Canada turned down: the majority of Canadian steel exports cut to a 25% tariff up to a quota, with anything above that staying at 50%; aluminum cut to 25% with no quota; a lower tariff on passenger vehicles; the since-enacted tariffs suspended; and the lumber tariff eliminated. Asked to confirm that, Wiseman declined to get into details but called it "broadly accurate."

The sticking points, per the Canadian side: medium and heavy-duty vehicles, which the U.S. resisted including in tariff relief and which Wiseman said Canada "needed" in — an issue he said affects General Motors and Ford operations in Canada. Carney also said the U.S. demanded Canada constrain its ability to strike separate trade deals with other countries, and sought to curtail French-language content requirements on digital and streaming services. Wiseman called the French-language question "non-negotiable" and said the trade-deal issue "was not an issue about China."