Trump hit by domestic backlash as Canada trade war threatens higher prices

U.S. President Donald Trump reignited his "51st state" rhetoric on Sunday, claiming Canada wanted the benefits of being a U.S. state without actually being one. This comes as trade talks between the two nations hit a snag. In a post on his social platform Truth Social, Trump declared, "Canada wants the benefits of being a State, without being one!!! They have charged our great farmers, for many years, massive amounts of Tariffs. No more!!! President DJT."

Following the breakdown of negotiations, Canada's Prime Minister Mark Carney informed his negotiators that they would match Trump's 50 per cent tariffs "dollar-for-dollar" in industries such as steel and dairy. The retaliatory tariffs would come into effect on September 8, the day after Labour Day. The specifics of what was offered or requested by either side during the final negotiations remain scant.

Carney cited three issues that led to the collapse of the negotiations. Firstly, while auto tariffs had seen some progress, larger vehicles including trucks were not included in the U.S. deal. Secondly, the U.S. was only prepared to offer a 25 per cent reduction in steel and aluminum tariffs, down from 50 per cent, and a 15 per cent cut in auto duties, down from 25 per cent.

Lastly, Canada refused to accept the U.S.'s desire to include terms that would restrict Canada's ability to negotiate trade deals with other countries.

These conditions, Carney argued, would undermine recent agreements with Indonesia and the United Arab Emirates, as well as ongoing talks with India. The prime minister's office highlighted Carney's track record on trade, noting his leadership group had secured 20 deals since the Liberal Party came to power in spring 2025. "We believe in free trade... the Americans wanted to restrict that. They had language that they wanted to restrict. Unacceptable," Carney stated.

The French language and Quebec culture also emerged as sticking points, with Carney alleging threats from the U.S. regarding these issues. Prime Minister Carney convened a meeting of Canada's provincial premiers on Saturday, outlining measures to protect Canadian interests, including the September 8 date for retaliatory tariffs.

He emphasized the importance of continued collaboration among provincial and territorial governments, citing the Team Canada approach's role in navigating the trade war. Most of Canada's premiers seemed to back Carney's decision to withdraw from the talks, with B.C. Premier David Eby supporting a tough stance and Ontario Premier Doug Ford advocating for a "dollar-for-dollar, tariff-for-tariff response."