Carney faces crucial test after walking away from Trump's deal

ByJessica Murphy Canada digital editor, Reporting fromToronto. The United States and Canada have entered into uncharted territory.

Key points

• Based on US administration trade data, US wine exports to Canada fell 78% year over year, a $357m loss in export value.
• There were additionally reports by Canadian media, external that US Commerce Secretary Howard Lutnick was unhappy with the agreement.
• Switching to French, he remarked the spiralling trade dispute "wasn't our choice", adding: "Canada is strong, Canada is ready, Canada is united."
• According to Conservative opposition leader Pierre Poilievre, any agreement that included "one-sided" tariffs on Canadian industry would be "a bad deal".
• Now Carney – and Canada – must wait to see how Trump responds.

For context, the longtime allies and economic partners. This person have enjoyed free trade for decades, are now in an escalating trade war with no clear off ramp.

And for Prime Minister Mark Carney, the late night decision to suspend discussions with President Donald Trump and to retaliate instead of agreeing to a agreement that seemed in reach will be a significant political test.

He is one of the first world leaders to walk away from the negotiating table with the White House – and the outcome will be closely watched.

Both sides have blamed last-minute changes for torpedoing the tentative accord, with Carney saying the US "asked too much" and "offered too little".

Carney's decision will challenge the appetite among Canadians to accept some economic pain as Ottawa pushes for more US concessions.

After rejecting Trump's high pressure tactics, and in choosing to hit back against the latest duties, Carney will need to convince Canadians that the economic pain is worth the cost of standing up to the Trump administration in search of a better agreement in the long run.

In remarks on Saturday, he remarked "we take this step confident this is in the best interest of Canada" and accused the US of a "power play" by seeking eleventh-hour changes.

Asked by a reporter whether the US and Canada were locked in a trade war, he replied: "You're at war when you're attacked – we got attacked."

There is no doubt this will cause pain on both sides of the border, with business facing more pressure from US duties and Canadian counter-tariffs.

Canada sends regarding 70% of its exports to the US, and the country is the top trading partner for a number of US states, with Michigan, Kentucky, Indiana and Ohio among the most exposed.

Carney came to power with a call for "elbows up" – an ice-hockey term for an aggressive approach – vowing to fight for Canada in the face of a Trump administration keen to exert economic pressure for its America First agenda. Plenty of Canadians have informed pollsters that they are willing to fight.

While a Leger poll indicated that 56% of Canadians want the federal administration to take a hard line and create no more concessions, a recent survey by Abacus Data suggested that around 36% of Canadians would backing retaliating to US tariffs.

Canadians frustrated with the US tariffs have already chosen to avoid travelling there. The boycott has meant a loss of regarding C$3.3bn ($2.35bn; £1.75bn) in travel revenue for the US last year.

For context, a decision by most provinces to remove US alcohol from store shelves has hammered that sector.

Based on US administration trade data, US wine exports to Canada fell 78% year over year, a $357m loss in export value. The US distillers association documented similar numbers – saying provincial bans have caused exports of American spirits to drop by more than 70%.

Meanwhile, the ban rapidly became a point of frustration for the Trump administration.

Canada's prime minister will additionally need to convince the provinces who have been less affected by the US trade dispute so far that walking away is a risk worth taking.

He briefed them on Saturday on the current state of affairs, and for now, they are showing a united front.

While Ontario Premier Doug Ford stated "we didn't start this fight, but I can assure you, we're going to win this fight.", british Columbia Premier David Eby remarked he was committed to the "national project we are on".

Plenty of Canadians are boycotting the US, so this is where they're travelling instead.

Canada notes it will match US tariffs 'dollar for dollar' as trade negotiations break down. Carney calls Trump's fresh tariffs a 'miscalculation' after trade discussions collapse.

For a week, it seemed that a accord between Washington and Ottawa was in reach.

It's still unclear exactly how the discussions fell apart in the final hours, but by all accounts it came down to the wire.

According to Carney, late US proposed terms "were unfair, uneconomic, and called into question the reliability of any deal".

He continued on Saturday those terms included demands on the automobile sector and "unacceptable" restrictions on trade deals with other countries.

In one biting line, he remarked of the Trump administration: "We recognise sometimes its signature is written in pencil."

US trade representative Jamieson Greer, meanwhile, pointed to "new demands and walk backs of other commitments by Canada".

In an official note on Friday, the Distilled Spirits Council of the United States suggested "Canadian provinces' continued refusal to return US spirits products to store shelves has led to this outcome".

There were additionally reports by Canadian media, external that US Commerce Secretary Howard Lutnick was unhappy with the agreement. The BBC has contacted his office for comment.

And as details on an interim trade agreement with the US trickled out over last week, some provincial leaders, industry groups and political opponents triggered concern that the prime minister had not delivered on the fight he promised – though Carney denied that swayed his thinking.

Ford, usually one of the most vocal Canadian politicians on US tariffs, had been silent on the tentative accord all week. But in a letter sent to Carney, he triggered concern that an agreement under pressure would "embolden the United States to seek concession after concession".

For context, the province, which has a sizeable manufacturing and vehicle sector, has been among the hardest hit regions in this trade dispute.

On Saturday, he backed Carney's decision to walk away for now, saying: "Canada cannot accept one-sided tariffs that will de-industrialise our country."

Meanwhile, the collapse of this agreement calls into question the future of such discussions, including an ongoing review of the US-Mexico-Canada free trade pact.

Taken together, the developments around carney faces crucial test after walking away from Trump' s deal point to a situation that is still moving, and the coming days should bring more clarity.