Below are Prime Minister Mark Carney’s remarks after Canada suspended trade talks with the U.S. and the Trump administration imposed new 50 per cent tariffs:
Good morning everyone. I would like to take this opportunity to update Canadians on developments in our trade negotiations with the United States. I’m going to go through why we’re walking away from a bad deal, and what comes next.
(In French): For much of our history, Canadians were able to count on trade tailwinds: a stable relationship with the United States, increasingly open access to the American market, and rules that both countries understood and respected. These winds haven’t simply shifted direction—the climate itself has changed.
We can’t control the storm that blows in from Washington. We can, however, chart a new course by building Canada strong at home and diversifying our trading relationships abroad.
We are masters of our own house and the ideal partner abroad.
For over a year, Canada has worked intensively and in good faith with the United States to negotiate a new comprehensive trade deal. We’ve been pragmatic, patient and persistent. We pursued every opportunity to reach an agreement that protects Canadian workers and their families, that strengthens our economy, and that respects Canadian sovereignty.
We have been under no illusions. We recognized from the start that America has changed. Early last year, in this room, I observed that the decades-long process of steadily increasing integration between our economies was over. Our government understood, before many, that America would transform all of its commercial relationships, that it would put a series of tariffs on its closest allies and use economic integration as a weapon. We recognized that sometimes its signature was written in pencil.
Prime Minister Mark Carney explained why the government chose not to sign a trade deal with American counterparts as U.S. President Donald Trump’s 50 per cent tariffs on almost $30 billion of Canadian goods are in effect. ‘We were not prepared to compromise Canada’s sovereignty or undermine our key industries,’ Carney said.
We worked in that context to try to strike a fair deal on which Canadian businesses and workers could rely. Our goal has always been to get the best deal for Canadians, never a deal at any price or on any time frame.
Last month, when the US announced another round of unjustified tariffs, I gave our negotiating team a new mandate to seek a fair deal negotiated in good faith. Because I believe that people on the ground on both sides of the border want this relationship to work. The bonds between Canadians and Americans are long and they remain strong. A mutually beneficial trade agreement is possible. One that respects our sovereignty. One that builds on our complementary strengths. One that lowers costs for families on both sides of the border. One that creates jobs for our workers.
Canada has always worked towards these goals, even while America’s attention and dedication to them have wavered. We’ve consistently proposed long-term partnerships, while America has often pursued short-term transactions. The gap between partnership and competitor unfortunately has remained too wide in recent days.
So last evening I instructed our negotiators to return to Ottawa. We cannot accept what they’ve offered, and we will not give what they’ve asked.
Over the past year, the U.S. has imposed a series of tariffs that violate its commitments under our agreement with them and Mexico, so-called CUSMA. The United States has continually changed their rationale for these actions, from fentanyl to taxes on U.S. tech giants, to certification of U.S. aircraft, to the sharing of tolls of a bridge that Canada built and paid for, to our dairy policy, to provincial decisions to not sell American alcohol during a trade war, to a television advertisement that quoted Ronald Reagan, to smoke from wildfires while they threatened our communities.
Another prominent justification for U.S. tariffs has been their claim that, since the United States runs, quote, a ‘trade deficit’ with Canada, we were ‘ripping them off.’ Also a quote. But the U.S.’s narrow merchandise trade deficit only exists because the U.S. buys so much of its energy from Canada. Canada fuels American growth: supplying 99 per cent of their natural gas imports, 85 per cent of their electricity imports, 60 per cent of their crude oil imports. I don’t think they want us to stop sending any of that energy.
And if you look more broadly at the comprehensive U.S.-Canada trade balance, which includes the many services, from finance to entertainment, that we buy from the United States, that shows a persistent American trade surplus.
Most fundamentally, trade is about building mutual strength – creating a relationship that benefits both countries. For example, Canada is the largest customer for U.S. cars—in fact, we buy more American-built cars and trucks than the United Kingdom, Japan, and China combined.
It’s the same for American steel products. Canada is also the largest customer for 26 U.S. states, and a top three customer for 45 U.S. states. Last year, Americans sold almost $600 billion in goods and services to Canadians – that’s more than $1.6 billion every single day. Canadian exports to the U.S. lower the costs for American families. In contrast, tariffs are taxes, taxes which are ultimately paid by US consumers.
While the U.S. has imposed a seemingly endless stream of tariffs and threatened more, Canada has, by contrast, taken several steps in good faith to try to find compromise and secure a comprehensive deal in the best interest of both Canadians and Americans.
Our negotiators sought not only to reduce tariffs, but also to restore a degree of certainty and stability: through a new global agreement that Canadian businesses and workers can rely on. Which brings me to the recent negotiations.
After opting against a trade deal with American counterparts, Prime Minister Mark Carney said Canada’s government ‘recognized from the start’ that the U.S. has changed. ‘We recognized that sometimes its signature was written in pencil,’ Carney said.
Last month, the U.S. announced that effective August 19, it would impose 50 per cent tariffs on a series of industries ranging from hockey equipment to clothing, cement and beer. The only advantage of this latest threat was that it was a catalyst for more intensive negotiations.
Our objectives in these latest talks have been to preserve tariff-free access to the US for the vast majority of Canadian businesses; secondly, to provide greater stability to our trade relationship; thirdly, to significantly reduce US tariffs on our key strategic industries, so that Canadian businesses in these sectors would have the best access of any in the world; fourth, protect our small and medium sized businesses including by removing the imminent threat of new tariffs; and fifth, and fundamentally, maintain Canada’s flexibility, independence, and sovereignty so we can keep building the country Canadians want.
Canada has made offers to secure a fair, comprehensive deal that would be in the best interests of Canadians. We were willing to drop our remaining retaliatory tariffs on strategic sectors, particularly steel, aluminum, and autos, if the United States substantially lowered theirs to levels that made it economic for Canadian companies to export to the United States. In exchange for a fair deal, we would encourage our provinces to return U.S. alcohol to the shelves. And we would take administrative measures to protect supply management without changing the system itself, the U.S. quotas or the tariffs that would apply.
There were some things we wouldn’t do. We were not prepared to compromise Canada’s sovereignty or undermine our key industries.
We were not prepared to compromise on our sovereignty, the protection of the French language, and our culture. To our American colleagues, let us be clear: for my government and for Canada, these issues were never on the table, even though the United States tried until the very last minute.
Now, in recent weeks, there had been made important progress made towards a possible agreement, an agreement that would have reinforced Canada’s position as having the best deal in the world with the United States, including by securing the best terms in each of Canada’s most important strategic sectors and by providing greater certainty about our future trading relationship. And while we believed, earlier this week, that we were moving towards a mutually beneficial agreement, in recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits to Canada, and called into question the reliability of any deal. In short, they asked too much and they offered too little.
More fundamentally, the cumulative effect of U.S. demands revealed the limits of their commitment to a true economic partnership. As I said earlier, as a result, last evening, I suspended trade negotiations with the United States and directed our negotiators to return to Ottawa. I want to thank Minister LeBlanc and our chief negotiator Janice Charette. Their team, they worked hard, in good faith, right up to the last minute to defend the interests of Canadians.
Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses. Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Also include products currently subject to unjustified Section 232 and 338 tariffs. This is a focused response to protect and defend our industries and allow them to compete with U.S. products in the Canadian market.
In the coming days, we will release the details of these new tariff measures, measures which will come into force the Tuesday after Labour Day.
Let me be clear: we take this step reluctantly. Reluctantly, because we recognise that some of these measures will raise costs and reduce choice for Canadians. Reluctantly, because we recognize that some U.S. companies and some U.S. states are innocent bystanders in a dispute they did not want. Reluctantly, because this trade dispute is preventing Canada and America from doing so much good that we could do together.
At the same time, we take this step confident that it is in the best interests of Canada. And that by rejecting a bad deal, by standing up for Canada, by focusing on what we can control, we will build Canada strong for all.
Building at home and diversifying trade abroad is not our Plan B. It has been our Plan A from the start. Canada will continue to pursue this path to build Canada Strong, because it’s right and it’s working.
We are moving rapidly to build major infrastructure. We have already referred 27 nation-building initiatives to the new Major Projects Office – new ports, mines, energy corridors from every region of the country that now represent $500 billion in new private investment. Projects that will help Canada build bigger, move faster, and trade more with the world.
Through Housing Canada, we are accelerating the construction of affordable housing. In just a few months, this new agency has committed to building nearly 17,000 homes across 17 partnerships. We are building the local infrastructure that Canadians rely on every day thanks to the new Building Strong Communities Fund, which represents a $51 billion investment. More than 100 projects have already been announced across the country—including new hospitals, new community centers, and new transit lines—under agreements with Yukon, the Northwest Territories, Nunavut, Ontario, and Quebec. We will also double the capacity of our electricity grid by 2050 so that Canadians have access to affordable, sustainable energy for generations to come. Because controlling our energy means controlling our destiny.
Last Monday in St John’s, the governments of Canada, Québec, Newfoundland and Labrador launched the largest single investment in Canada’s history to build the largest clean energy project in North America ever. A second James Bay.
It will produce enough clean electricity to power every single vehicle in Canada. We are building our economy while taking charge of our security by investing half a trillion dollars into our defence, expanding our shipyards, growing our aerospace industry, increasing our cyber capabilities. And we’re realizing Canada’s full potential as an energy superpower, in nuclear, LNG, renewables and low-carbon oil and gas.
These are the initiatives that are the future of our country.
Canada is now the best-connected economy in the world. Over the last year we have signed more than 20 trade and security deals across five continents. We completed our most recent deal, with the UAE, in a record 47 days. Canadian businesses now enjoy tariff-free access to 1.5 billion consumers. Over the next six months, we will double that number through new trade deals from ASEAN, to India.
This fall, we will begin discussions with the European Union—the world’s second-largest economy—to deepen and strengthen our security and economic partnership.
After Canada chose not to sign a trade deal, the U.S. is setting a slew of new 50 per cent tariffs on almost $30 billion of Canadian goods into motion, which Prime Minister Mark Carney said are miscalculated. ‘They’re a miscalculation because Canadians will always take care of each other,’ Carney said. ‘We know we’re stronger together.’
Canada is building such unparalleled market access because we are trusted, because we are reliable, and because we have what the world wants. That’s why the world is coming to our door. In just three weeks, we’ll host the first Canadian Investment Summit in Toronto. The summit is attracting the world’s largest investors, who collectively manage over $100 trillion in assets. They will find a Canadian economy that has never been more connected or more ambitious.
We are cutting taxes, eliminating barriers, and accelerating the transformation of our economy. We have lowered the tax rate on new business investments to just 13%—4.5 percentage points lower than in the United States and roughly half the G7 average. We are streamlining approval processes and making them more predictable, while investing alongside the private sector.
We are building a unified Canadian economy. Over the past year, we have eliminated all federal barriers to internal trade. We have eased conditions so Canadian workers can put their skills to use across the country. We are also working with the provinces and territories to break down the barriers that have divided our economy for generations. We are taking action so that Canadians can buy Canadian, hire Canadian workers, and build with Canadian materials more easily.
This fall, in Budget 2026, we will go further to make Canada even more competitive and attractive for businesses and strategic investors to build, invest and grow.
The new U.S. tariffs are designed to hurt and divide us. They’re a miscalculation. They’re a miscalculation because Canadians will always take care of each other. We know we’re stronger together.
In the last year and a half Canadians have met this moment with resolve, with purpose, with strength.
In many ways, vacationing in our National Parks. Buying Canadian products. Choosing Canadian. Small acts of solidarity repeated millions of times that make a statement: we are masters of our destiny.
The government is matching that spirit with $25 billion to protect Canadian workers and businesses hurt by American tariffs. We’re helping our small and medium-sized businesses respond by investing in equipment, productivity, and supply chain resilience. And we’re financing large companies to keep large employers operating and retain their workers. We are helping our hardest-hit industries retool and pivot to those new international markets. And we’re being our own best customer. We have the right plan to build Canada strong. We’re on track and it’s working.
At the same time, we recognize that some of the biggest payoffs of this plan, of this transformation, will take time. That’s why we are also focused on giving Canadians a boost today and a bridge to a better
Tomorrow. SO we’ve cut taxes on income, on housing, and on gas. We’ve introduced the Canada Groceries and Essentials Benefit. Up to $1,890 per family helping 12 million Canadians get ahead.
We’re stronger now than when the United States started this trade war. More unified, more determined. more ambitious. With the strongest fiscal position in the G7 and a resilient economy, Canada has all the resources we need to pivot and prosper. Growth is accelerating, we’re projected to have the second-fastest rate in the G7 this year and next. We are creating jobs in this economy at four times the rate of the United States. Our non-U.S. exports are up sharply – they’re on track to double over the next decade. Foreign direct investment in Canada is at its highest level in two decades. It’s running at twice the rate of our nearest G7 competitor. Canada now ranks as the most attractive country in the world for infrastructure investment.
Last spring, I warned that America is trying to break us so they can own us. And I promised that that will never, ever happen. We are keeping that promise. Canada is becoming stronger and less dependent on America. We are already giving ourselves more than they can take away. And we are just getting started.
As we observed earlier this week in St, John’s, Canadians don’t submit to the weather; we thrive in it. We don’t wait to see which way the wind is blowing or surrender ourselves to the waves to be storm-tossed by events. We set our own course. We make our own weather.
In Canada, we are masters in our own house, from coast to coast.
Building Canada strong. For all. Thank you very much and I look forward to your questions.
