The US and Canada failed to reach a trade deal on Friday, and Washington imposed 50% tariffs on roughly $20 billion of Canadian goods on Saturday. Canadian Prime Minister Mark Carney says Ottawa will retaliate dollar for dollar starting Sept. 8, targeting steel, dairy, agricultural equipment and pulp and paper.
The United States imposed 50% tariffs on about $20 billion worth of Canadian exports on Saturday, covering goods from wine and dairy to cement, clothing and hockey equipment. Both sides blamed each other as the talks fell apart on Friday.
Carney said Canada's response takes effect on Sept. 8 and will hit sectors including steel, dairy, agricultural equipment and pulp and paper, with more details to follow in the coming days.
Why the talks collapsed
Both sides had signaled progress as recently as Thursday, when Canada's trade minister told reporters a deal was very close. Trump had also postponed the original Wednesday deadline hours before it hit, citing a soon-to-be-finalized agreement.
That optimism evaporated on Friday. Carney said in a statement that last-minute changes to the US proposal were unfair and uneconomic and undermined confidence in any deal, and he pledged Canada would retaliate dollar for dollar. US Trade Representative Jamieson Greer countered on X that Canada declined to finalize terms agreed earlier in the week, despite Washington offering tariff reductions on steel, aluminum, autos and lumber.
Ottawa pairs retaliation with industry support
According to Crypto Briefing, Canada's September package also includes a $5 billion fund for businesses hit by the tariffs, with dairy, alcohol and automotive producers expected to draw most of the support. Atlantic Canada is set to receive $80 million in dedicated regional funding. Canada had rolled back some of its existing 25% retaliatory tariffs on US goods just a week earlier, effective Sept. 1.
The tariffs rest on a little-used legal provision
The US tariffs draw on Section 338 of the Tariff Act, a rarely invoked clause that gives the president broad authority to impose duties over trade practices deemed discriminatory, according to Crypto Briefing. The standoff also carries implications for the US-Mexico-Canada Agreement, the trilateral framework that replaced NAFTA and underpins continental trade.
Carney, who was elected in 2025 on a platform opposing US trade coercion, also defended the cross-border energy relationship at a Saturday press conference: "Canada fuels American growth."
Sources: CNBC, Crypto Briefing, Crypto Briefing
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