Canada has suspended trade negotiations with the United States after Ottawa said last-minute changes to Washington’s proposed terms were “unfair” and “uneconomic”. Prime Minister Mark Carney said the decision came despite recent progress in the talks. Canada had been seeking tariff-free access for most of its businesses, lower US tariffs on key industries and protection for small and medium-sized businesses.

“Over the past 18 months, Canada’s new government has focused on building our strength at home, diversifying our partnerships abroad, and striking a fair deal with the United States,” said Carney in a statement.

Announcing the suspension of the talks, Carney said, “In recent weeks, we made important progress toward improving Canada’s position as having the best deal in the world with the US. However, that progress has not been enough to meet our objectives for Canadians. As a result, this evening, I have decided to suspend trade negotiations with the US and have directed Canada’s negotiators to return to Ottawa. They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute. However, last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”

The decision came as the US is set to impose a 50 per cent tariff on around C$28 billion worth of Canadian goods from midnight, according to the Canadian government.

Canada will respond with matching tariffs “dollar for dollar”, Carney said.

He also directed Canadian trade negotiators to return to Ottawa, saying the latest US proposals had raised questions about whether any future deal could be relied upon.

Carney said Canada would continue reducing its dependence on the US by strengthening its domestic economy and expanding trade with other countries.

Canada’s existing free-trade agreements give its businesses preferential access to 1.5 billion consumers, he said. The government expects to double that market access by the end of the year.

Ottawa will also introduce additional measures to support Canadian workers and businesses. Carney said this would build on nearly C$25 billion in support provided over the past 18 months.

US Trade Representative Jamieson Greer blamed Canada for the breakdown in negotiations.

In a statement read to reporters shortly before midnight, Greer said, “Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days,” he said.

The development came a day after US President Donald Trump had expressed hope that a deal could be reached.

Speaking to reporters at Joint Base Andrews before leaving for Myrtle Beach, South Carolina, Trump was asked about the status of the Canada deal.

He had said, “Pretty much, I think so, we’ll see. I’ve dealt with the Prime Minister, have a good relationship and yeah, we have to take care of our farmers. Our farmers are very important to me and the deal with Canada is moving along and we should be able to have a deal with Canada.”