What we know about how the Canada

What we know about how the Canada-U.S. trade talks fell apart

Pickup trucks, tariff relief and trade restrictions were sticking points, officials say

Prime Minister Mark Carney said one of the main reasons he walked away from a deal with the Trump administration is because Washington demanded terms that would "destroy" big Canadian industries including the auto, steel and aluminum sectors.

He made the comment while facing calls from the Conservatives to reveal the details of the proposed deal that fell apart late Friday night.

"We did make some progress in recent weeks," Carney said on Monday in Lévis, Que. "In the end, that momentum reversed and we could not accept what the U.S. had offered, nor could we give what they asked."

U.S. Vice-President JD Vance offered a different version of events, accusing Canada of putting forward "a bunch of unreasonable last-minute demands" and urging Carney to "stop taking advantage of America."

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While the federal government won't publicly reveal the details of the negotiations, Ontario Premier Doug Ford, who has been briefed on the talks, called it a "bad deal" and said he's glad Carney didn't sign.

Flavio Volpe, a member of Canada's advisory committee on this file and president of the Automotive Parts Manufacturers' Association, said after negotiators agreed in spirit to a potential deal, it was up to dozens of Canadian and American officials to write up the exact wording of an agreement.

When that "text started to crystalize," Volpe said, it didn't match what was discussed.

Here's what CBC News has learned happened behind closed doors.

CBC News has reported that before the deal's deadline, one of Trump's top deputies — U.S. Commerce Secretary Howard Lutnick — expressed dissatisfaction with what had been negotiated and pushed for the U.S. to do better.

Volpe said Lutnick has taken a hard line when it comes to Trump's objective to drain Canada of its vehicle production.

American negotiators had initially agreed to drop the headline tariff on Canadian autos from 25 to 15 per cent, Volpe said. A source said American auto content would be exempt, reducing that tariff rate by up to half. (The sector had also been pushing for an exemption for Canadian-made auto content, which the U.S. didn't agree to, a source said.)

Then right before the deadline, the U.S. revealed it planned to exclude medium- and heavy-duty trucks. That move left out North America's most lucrative vehicles: pickup trucks.

Ford's F-Series pickups and the General Motors Silverado are made at Ontario plants and roughly 20,000 workers would have been severely impacted, Volpe said.

"The tariff was going to be so high in those places to not make that product viable," Volpe told CBC's The Current on Monday.

Carney called that exclusion a "big change" to the terms.

In the final hours of talks, the Americans also tried to restrict Canada's ability to strike trade deals with other countries, Carney said.

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That move would have been a direct hit to the prime minister's strategy to become less reliant on the U.S. and diversify trade.

"So the idea that the United States would have a word to say in the sovereign decision of Canada to enter into a free trade agreement with another reliable trading partner, obviously wasn't something that we were prepared to consider," Canada-U.S. Trade Minister Dominic LeBlanc told CBC's Power and Politics on Monday.

Canada won't 'rush back to Washington' unless there's a 'viable' deal: LeBlanc

The U.S. also wanted Canada to apply sectoral tariffs, primarily on steel and aluminum, to its trading partners. Countries that have a free trade deal with Canada would face tariffs on imports above 2025 levels, a source said.

Carney said he was only prepared to align with the U.S. on sectoral tariffs if they benefited Canada.

"That's us deciding to do something that's in our joint interests as opposed to being told to do something or being restricted to doing something else," he said.

In the end, the prime minister also said there "wasn't enough movement" on American tariff relief for steel, aluminum and derivative products.

Sources said the U.S. had planned to reduce its 50 per cent tariffs on Canadian steel and aluminum to 25 per cent. Derivative products would have been subject to tariff rate quotas, a source said.

Ford says he's glad Canada didn't sign 'bad deal' with U.S.

Washington was also talking about dropping a 10 per cent Section 232 tariff on Canadian softwood lumber by Sept. 1, but existing countervailing and anti-dumping duties would remain, industry sources said.

Carney said the Americans also pushed against the Canadian requirements for bilingual product labelling.

U.S. Trade Representative Jamieson Greer dismissed the labelling claim on CNBC, calling it a "funny, fake story."

Carney fired back on Monday saying it's a fact.

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He called the labelling issue an American irritant and said in the final hours of negotiations, the Americans took issue with Canadian rules that ensure French-language content is easy to find on streaming platforms like Netflix.

LeBlanc said it was the "cumulative total of a series of things" that surfaced near the end of talks that made Carney decide the agreement in front of them wasn't in the best interest of Canada.

Concessions Canada was willing to make

If the U.S. had agreed to "substantially" lower the tariffs hitting Canadian industries hard, Carney said he was willing to:

Carney asked premiers to end procurement policies that exclude U.S. companies from bidding on projects as a retaliatory measure against American tariffs, Nova Scotia Premier Tim Houston said.

Ottawa was also prepared to adjust dairy import licenses, giving licenses directly to retailers, an industry source said. The move could have made it easier to sell U.S. milk and cheese in Canadian stores, helping the Americans fill their entire duty-free trade quota under CUSMA.

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The prime minister was elected on a promise to stand up to U.S. President Donald Trump and has promised he wouldn't sign a bad deal.

If he hadn't walked away, it would have been up to Carney to sell it to Canadians at a time when polling shows there isn't a lot of support for concessions and key figures were warning against what was on the table.

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Manitoba Premier Wab Kinew said he thought Canada could push for a better deal.

Former Trudeau-era deputy prime minister and finance minister Chrystia Freeland told Bloomberg News a "bad outcome" would be Canada accepting a deal with permanent sectoral tariffs.

Canada's former chief negotiator during Trump's first administration, Steve Verheul, also warned, sources said, that Canada would be giving up most of its leverage before even entering CUSMA talks.

Canada 'should be prepared to duke it out for 2 years' with U.S.: Kinew

Asked about the criticism, LeBlanc said Carney has been clear that the American tariffs are a violation of the CUSMA agreement Trump signed himself. But he said it wasn't "realistic in those sectors to get to zero tariffs in the short term" because the U.S. is tariffing all of its trading partners.

Angus Reid Institute president Shachi Kurl said on Monday that her polling shows 76 per cent of Canadians say it was the right decision for Carney to walk away.

"Almost seven in 10 Canadians tell us the prime minister showed strength by making the decision that he did," Kurl told Power and Politics. "It's a pretty strong endorsement."

LeBlanc says he's not going to rush back to the table unless it's clear from the U.S. that there's an offer "that puts us in an economically viable position" when it comes to steel, aluminum, autos and forest products.

Ashley Burke is a senior reporter with the CBC's Parliamentary Bureau in Ottawa. She was recognized with the Charles Lynch Award and was a finalist for the Michener Award for her exclusive reporting on the toxic workplace at Rideau Hall. She has also uncovered allegations of sexual misconduct in the Canadian military. You can reach her confidentially by email: ashley.burke@cbc.ca

Kate McKenna, Philip Ling, Peter Armstrong and Rhianna Schmunk