U.S.-Canada trade talks collapse, massive tariffs to take effect
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Add Axios on Google 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.
Friction point: "Canada will match those tariffs dollar for dollar to protect our workers and businesses," Carney wrote.
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.
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