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Canada is hitting back. Prime Minister Mark Carney announced on August 22 that Ottawa will impose retaliatory import taxes targeting steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, matching US tariffs “dollar for dollar” after trade negotiations between the two countries fell apart.
The retaliation follows the US enacting a 50% tariff on roughly $20 billion worth of Canadian exports, covering about 5% of Canada’s total shipments south of the border. Those tariffs took effect at 12:01 a.m. ET on August 22, and Carney’s response came the same day.
What broke the talks
Carney indicated that while some progress had been made at the negotiating table, it wasn’t enough. The US reportedly introduced last-minute changes that the Canadian side deemed “unfair, uneconomic,” effectively killing the deal.
Canada’s response was swift: suspend negotiations entirely and recall its negotiators from the table.
Carney also signaled that support measures for Canadian workers and businesses affected by the tariff fallout are on the way.
A pattern, not an anomaly
This isn’t the first time the US-Canada trade relationship has descended into tit-for-tat tariff escalation during President Trump’s second term. Earlier rounds targeted steel, aluminum, autos, and lumber.
In 2025, Canada had actually taken a conciliatory step, partially rolling back some retaliatory tariffs on US goods effective September 1. Ottawa maintained specific duties on steel, aluminum, and autos.
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