Canada-US Trade Deal Collapses, Ford Calls for Critical Minerals Cutoff

Mining sector in limbo after talks break down

Apart from the key issues that ultimately fractured negotiations, Carney suggested that the deal was “a fair deal, a good deal for Canadians, not perfect, but a good deal became a deal we could not accept.”

Various elements related to Canada's resource sector were under discussion, including the reduction of tariffs on steel and aluminum to 25 percent from 50 percent rate. Tariffs on autos would have fallen to 12.5 percent from 25 percent.

Also discussed as part of the negotiations was US access to Canadian critical minerals, and reports that US representatives were seeking right of first refusal to all critical minerals mined in Canada.

In an article published on August 18, S&P Global explores what right of first refusal would mean for Canada's mining sector, noting that it would put miners and producers in a tough spot and questioning whether it would be legal.

Both countries have been placing increasing importance on critical minerals.

Earlier in the year, the US administration’s lead negotiator and Trade Czar Jamieson Greer said that the US didn’t want to disrupt the Canada-US relationship on energy and critical minerals, but added that Canada should not attempt to use those resources as leverage in negotiations.

With the negotiations breaking down, US tariffs are now in effect; however, for the time being, key exports of oil and gas, potash and critical minerals have been excluded.

Ford calls for critical minerals cutoff

Ontario Premier Doug Ford suggested nothing should be off the table when it comes to dealing with the US, including cutting off exports of electricity and critical minerals.

Trump responded by calling Ford a "flunky" and saying that he should "fall in line."

For his part, Carney has vowed to keep fighting, although he has implied that trade talks with the US have been challenging at times, saying that in some cases the deals are "written in pencil."

He also said that Canada is ready to return to the table when the US shows the "right attitude."

Additionally, Carney noted that Canada will impose reciprocal, dollar-for-dollar tariffs.

Those tariffs are not set to take effect until September 8, which may itself be an olive branch to get the negotiations back on track. Trump has already pushed back, posting on his Truth Social account that he plans to increase tariffs on all automobiles to 50 percent starting on January 1, 2027.

The president is using much of the same rhetoric he has employed since his first term in office, noting a US$60 billion trade deficit between the two countries. While the statement is accurate, it lacks nuance regarding the difference in size between the two countries and the relative sizes of their economies.

In terms of trade between the two, Canada outspends the US on a per capita basis by a considerable margin.

In 2025, the value of exports from Canada to the US was US$454 billion, while imports came in at US$426 billion. On a per capita basis, the US spent US$1,247, while Canada spent US$10,291.