A truck crosses the Peace Bridge from Buffalo, New York, to Fort Erie, Ontario, Canada, on August 18, 2026.
Cole Burston | AFP | Getty Images
The United States and Canada failed to reach a trade deal late Friday, with the United States announcing it would impose 50% tariffs on some Canadian imports, increasing tensions between the longtime allies.
Trump administration officials said Section 338 tariffs on about $20 billion worth of Canadian goods would go into effect after midnight Saturday.
Canadian Prime Minister Mark Carney halted trade talks and said Canada would retaliate against the dollar for new tariffs.
The U.S. government’s decision came after three days of talks in Washington between Canada’s Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamison Greer.
“I have decided to suspend trade negotiations with the United States and have directed Canadian negotiators to return to Ottawa,” Carney said in a statement.
“They (the negotiators) have worked hard and in good faith to protect the interests of Canadians throughout this negotiation until the very last moment,” he said. “However, the last-minute changes to the terms proposed by the United States were unfair and uneconomic and called into question the credibility of any agreement.”
Although the new measures represent a relatively small portion of Canada’s exports, they are in addition to existing U.S. tariffs on steel, lumber and automobiles. The new tariffs could hamper Canada’s fragile economic recovery and affect how the two neighbors approach broader negotiations for a free trade agreement over the coming months.
These apply regardless of whether a company qualifies for preferential treatment under the U.S.-Mexico-Canada trade agreement, which has shielded much of Canada’s industry from previous U.S. tariffs.
