U.S.-Canada trade talks collapse, 50% tariffs go into effect - Ben Berkowitz Coutenay Brown

 

by Ben Berkowitz Coutenay Brown

It's an unprecedented breakdown in relations with the second-largest U.S. trading partner.

 

President Trump and Canadian Prime Minister Mark Carney at the July 2026 NATO summit. Photo: Harun Ozalp/Anadolu via Getty Images

 

Trade talks between the U.S. and Canada fell apart late Friday night, and both sides said steep new tariffs will go into effect.

Why it matters: It's an unprecedented breakdown in relations with the second-largest U.S. trading partner.

Catch up quick: Trump last month threatened to invoke Section 338 of the Tariff Act of 1930 to hit a slew of Canadian goods with additional 50% duties, including alcohol, hockey equipment, cement and dairy products.

• No president has ever used Section 338 to impose tariffs since it became law in 1930.
• The tariffs were scheduled to take effect at 12:01 a.m. ET Wednesday. The administration carved out key Canadian exports, including energy, potash and critical minerals, from the new tariffs.
• On Tuesday, Trump postponed the tariffs for three days, saying the two sides had a deal.

Driving the news: They did not.

• U.S. Trade Representative Jamieson Greer said late Friday that Canada had made last-minute demands that upset the pact, Bloomberg reported.
• Canadian Prime Minister Mark Carney, in a statement posted to X, alleged it was the U.S. that had made late changes to the terms, and said he had decided to suspend the negotiations.

Friction point: "Canada will match those tariffs dollar for dollar to protect our workers and businesses," Carney wrote.

• Carney said retaliatory tariffs would go into effect on Sept. 8 and would target dairy, appliances, agricultural equipment, pulp and paper, and electronics, the Associated Press reported.

By the numbers: Trade between the two countries totaled $376 billion in the first half of the year, per Census data — double China and trailing only Mexico.

The bottom line: After more than a year of threatening various stronger tariffs against Canada, the U.S. is making its most aggressive move yet to actually impose them.

Editor's note: This story has been updated to include additional details on Canadian retaliatory tariffs.

Ben Berkowitz Coutenay Brown

Source: https://www.axios.com/2026/08/22/us-canada-tariffs-trade-trump-carney

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