The clock ticked toward midnight on Friday as new U.S. tariffs on Canada loomed. Negotiators, holed up near the White House, struggled through final differences despite steady progress over a month of talks. U.S. officials claimed they offered Canada the best deal of any nation; Canadians saw it as unacceptable. In the waning hours, both sides dug in, with one Canadian negotiator describing "shadow figures" raising supposedly settled issues.

Back in Ottawa, Prime Minister Mark Carney spoke with Ontario Premier Doug Ford, who warned him plainly: Don’t take the deal. Ford refused to comply with a key U.S. demand to restore U.S. alcohol sales, which he and most provincial leaders had banned. American tariffs on Canadian steel and automobiles remained too high for long-term survival, Ford insisted.

Carney called his team in Washington for updates, then, just after 10:30 pm, pulled the plug and ordered them home. The collapse triggered an all-out trade war. Sticking points included Canadian rules promoting French-language media online and U.S. demands to dictate Canada’s steel tariffs on other countries.

Canada pushed for better treatment of its autos, EVs, and metal products, ultimately withdrawing its offer to cooperate on the Keystone XL pipeline, which Trump had long desired. On Monday, Trump vowed to raise tariffs on all Canadian cars, trucks, parts, and steel to 50 percent starting Jan. 1, calling Canadian officials "clowns" from "among the worst Nations in the World to deal with." He declared, "WE DON’T NEED CANADA, THEY NEED US!" Carney fired back, rejecting the notion that Canada is a U.S. subsidiary. Carney is now expected to announce retaliatory tariffs.

The breakdown stemmed from deep ideological, economic, and political misalignment, with red lines so far apart that major concessions—especially by Canada—would have been needed for agreement. This account draws on interviews with five American and Canadian officials, two former U.S. officials, and seven senior industry leaders briefed throughout the negotiations.