Carney says Canada and U.S. will step up trade talks after tariff threat

Canadian Prime Minister Mark Carney said Canada and the United States will accelerate trade talks after President Donald Trump threatened new 50 percent tariffs on a broad range of Canadian imports. The dispute matters because the United States is Canada’s largest trading partner, and the proposed duties would hit goods worth nearly $20bn, according to the U.S. Trade Representative’s office.

Carney told reporters Tuesday that he had spoken with Trump and that both leaders agreed to intensify negotiations immediately. He said Canada’s first goal is to secure a comprehensive agreement, while warning that Ottawa would consider all options if the threatened tariffs take effect.

Trump announced the tariff plan Monday, saying it was a response to what he described as discriminatory treatment of U.S.-made cars, alcohol and dairy products. Asked whether the Canada tariffs were tied to wildfire smoke, Trump said that issue was separate.

The proposed duties are due to take effect in 30 days, Reuters reported. The U.S. Trade Representative’s office said they would cover close to $20bn in Canadian imports, equal to about 5.2 percent of the $382bn in goods the United States imported from Canada in 2025, based on U.S. Census Bureau data.

Alcohol bans become part of talks

Carney said Canadian provinces should lift bans on U.S. alcohol only as part of a wider trade settlement with Washington. Nearly every province except Alberta and Saskatchewan has banned or sharply limited sales of American beer, wine and spirits in response to earlier U.S. tariffs.

Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said in a note that Canada had been the largest importer of U.S. alcohol by volume before the restrictions. She said Canadian imports of U.S. wine have fallen by more than 80 percent since February 2025, with other alcohol imports down by a similar amount.

Provincial leaders meeting this week in Prince Edward Island criticized the new U.S. tariff threat. Ontario Premier Doug Ford said Canada should answer the duties “dollar for dollar,” while Alberta Premier Danielle Smith said the measures would hurt workers on both sides of the border.

Saskatchewan Premier Scott Moe urged Ottawa to increase talks with the United States, saying the trade relationship is more important than any president or prime minister. British Columbia Premier David Eby rejected any quick reversal on alcohol restrictions, saying there was “not a chance in hell” that U.S. alcohol would return to store shelves in his province.

Political backlash in Canada and the U.S.

Canada’s opposition Conservatives also urged Carney to resist Trump’s move. In a statement, the party called the tariffs an unacceptable and unjustified attack on Canadian workers and businesses and said they should be withdrawn immediately.

Trump invoked Section 338 of the U.S. Tariff Act of 1930, which allows punitive tariffs of up to 50 percent against countries deemed to discriminate against U.S. goods. Reuters reported that the move marked the first known use of the provision in nearly a century.

The tariff list includes symbolic and consumer goods such as wine, cement, ice hockey gear, dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs. The announcement came shortly before U.S. and Mexican trade negotiators met for a third round of bilateral talks without Canada.

U.S. Senator Peter Welch of Vermont, a Democrat on the Senate Finance Committee, called the tariffs an extreme escalation of Trump’s trade war and said the White House should drop the threat. Candace Laing, president and CEO of the Canadian Chamber of Commerce, said the group had already raised concerns with Ottawa and feared further tariffs could follow.

The Canadian dollar weakened 0.1 percent to touch a one-week low of 1.4090 per U.S. dollar, or 70.97 U.S. cents, Reuters reported.

This story draws on original reporting from Al Jazeera.