WASHINGTON — Canada rejected a U.S. trade agreement that would have prevented 50 percent tariffs on Canadian goods, according to Trump administration officials. Prime Minister Justin Trudeau's government refused to concede on dairy quotas and softwood lumber, the core sticking points in weeks of negotiations.
The rejection clears the path for the White House to impose the tariffs across a range of Canadian exports, escalating a dispute that has strained bilateral relations. Trump has wielded tariffs repeatedly as a negotiating tool, and the 50 percent rate would mark a substantial escalation from previous threats.
Canadian industries dependent on U.S. consumers—particularly resource sectors—face significant exposure. U.S. manufacturers that rely on Canadian components could see higher input costs, complicating supply chains across North America's most integrated trading relationship, worth hundreds of billions annually.
The U.S. Trade Representative's office is expected to release a detailed list of targeted goods in coming weeks. Trudeau's government has indicated it will retaliate if the tariffs take effect.
Lawmakers from border states and those with deep ties to Canadian trade will likely pressure the White House over the economic fallout. Trudeau faces domestic criticism over whether refusing the deal was worth the tariff risk.
