Prime Minister Mark Carney said that disagreement over lumber tariffs with the United States contributed to the collapse of trade talks on Aug. 21.
The two sides have offered conflicting accounts on what led to the failure of the trade talks, which resulted in Washington imposing new tariffs and Ottawa responding with counter-tariffs.
The prime minister told reporters on Sept. 3 that during trade talks his government was pushing for “real relief” from U.S. tariffs affecting Canada’s forestry sector, and was “not satisfied with what was offered, or the durability of what was offered.”
He added that Ottawa did not want negotiations to produce short-term gains for Canada that could be “taken away a few months later or a year later,” which he said was what Washington had been offering.
“That being the case, it means that we need to reinforce the supports that we have in place for the forest product sector, to the companies themselves, as well as to the workers,” Carney said.
The prime minister previously told reporters that negotiations broke down because the United States wanted to restrict Canada’s ability to make trade agreements with other countries, sought to omit medium- and heavy-duty trucks from tariff exemptions, and made demands that would restrict Canada’s protections around the French language and Canadian culture.
After the United States imposed 50 percent tariffs on $27.6 billion worth of Canadian goods effective Aug. 22, Ottawa announced that it would impose dollar-for-dollar, rate-for-rate counter-tariffs on $27.6 billion worth of U.S. imports beginning Sept. 8. Washington has also threatened to raise its existing 25 percent automotive tariffs to 50 percent starting in 2027.
The United States had previously imposed tariffs on Canadian automobiles and auto parts, steel, aluminum and copper. It also imposed a 10 percent Section 232 tariff on certain softwood timber and lumber products effective Oct. 14, 2025, in addition to existing anti-dumping and countervailing duties.
While Washington’s new 50 percent Section 338 tariffs do not apply to products already subject to the Section 232 tariffs, they affect other Canadian wood products, including certain value-added products such as plywood, wood mouldings, paper and packaging, and particle boards.
The Canadian government will impose counter-tariffs of 15 percent, 25 percent or 50 percent on U.S. imports beginning Sept. 8, with the rates corresponding to the applicable U.S. tariffs. The measures cover sectors including pulp and paper and other products affected by the U.S. tariffs. Ottawa has also announced an additional $1.5 billion through the Regional Tariff Response Initiative as part of a broader $7.5 billion package of support for workers and businesses affected by the trade dispute.
Washington’s ‘Red Lines’
During the press conference, Carney was asked about comments made a day earlier by U.S. Commerce Secretary Howard Lutnick, who accused Canadian negotiators of introducing new terms in the final hours of the talks and said Ottawa had sought to “blow up” the deal for “political reasons.”
Carney rejected the suggestion that domestic politics had prompted Canada to walk away. He said he was elected in 2025 to build on Canada’s strengths and represent the interests of Canadians, adding, “I don’t think, with all respect, appointed, unelected cabinet members in the United States are experts on Canadian politics.”
Carney also responded to Lutnick’s characterization of the U.S. offer as the best deal Canada could obtain, saying Washington had since softened some of the positions it had treated as “red lines.”
“There are a few issues that the United States was arguing up to the last hour: ‘red lines, we’re not going to change, boom it’s in there. Our way or the highway, take it or leave it,’” Carney said.
“Now they’re not. So all of a sudden, they don’t care about Canadian language, or culture, and those elements. Well if they didn’t care, they shouldn’t have kept them in the deal.”
U.S. Trade Representative Jamieson Greer has disputed aspects of Canada’s characterization of the negotiations. On Aug. 26, Greer said Canada’s rules governing the discoverability of French-language content had never been a U.S. red line. The following day, Canada-U.S. Trade Minister Dominic LeBlanc said Ottawa welcomed Washington’s “withdrawing its positions” on the issue.
Greer also disputed Carney’s characterization of a U.S. proposal concerning Canada’s trade agreements with other countries. Greer said the proposal was intended to prevent third countries from using Canada as a route to send steel into the United States. He also said Washington had opposed extending proposed tariff relief to medium- and heavy-duty trucks, including Ford F-350, F-450 and F-550 models.
Carney said the U.S. position on heavy-duty trucks had also shifted since the talks broke down.
“Some of what they’re saying now is different than what they were drawing the line on, and we are always going to stand up for what’s in the best interest of Canada,” Carney said.
He added that an agreement that benefits both Canadian and American workers, families and businesses remains “possible.”
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