Breakdown in negotiations escalates tensions, risking bilateral trade flows valued at over USD 600 billion annually.
US-Canada trade negotiations collapsed over the weekend, shifting a long-simmering dispute into a potential trade war. The breakdown follows months of tensions under the Trump administration, which has repeatedly criticized Canada’s trade practices and threatened new tariffs on key exports like steel and aluminum.
Prior talks had aimed to resolve disputes over dairy subsidies, automotive rules of origin, and dispute-resolution mechanisms. The two nations exchanged USD 612 billion in goods last year, making Canada the largest US trading partner. Analysts warn further escalation could disrupt supply chains, particularly in the auto and energy sectors.
Markets showed muted reaction early Monday, with the Canadian dollar weakening slightly against the USD and equities in both countries remaining stable.