Trump Officially Hits Canada with 50% Tariff, Trade War Heats Up

The United States has officially imposed a 50% import tariff on approximately US$20 billion worth of Canadian products after trade negotiators from both countries failed to reach a trade agreement despite three days of talks in Washington DC.

With the deadline set by US President Donald Trump expiring on Saturday (23/8/2026) at 00.01 local time, US and Canadian officials confirmed that a trade agreement had not been reached.

Canadian Prime Minister Mark Carney affirmed that his government would retaliate against the new tariffs with an equivalent value.

“In recent weeks, we made important progress to strengthen Canada’s position to have the best deal in the world with the United States. However, that progress was not enough to meet our goals for the Canadian people,” Carney said in a statement.

Carney also outlined the steps the government would take to protect Canadian workers and businesses from the impact of the trade war. In addition, Ottawa will impose retaliatory tariffs on a number of US export products.

Products targeted by Canada’s retaliatory tariffs include steel, dairy products, household appliances, agricultural machinery, paper, and electronic goods from the US.

In a speech on the same day, Carney indicated that there had been last-minute changes to the terms from the US side, which prompted the Canadian government to recall its negotiating team to Ottawa.

“In recent days, the United States has put forward new conditions that are economically unreasonable, unfair, and reduce the net benefits for Canada as well as raise doubts about the reliability of any agreement,” Carney said.

“In short, they are asking for too much and offering too little.”

Carney also accused the US of seeking to limit Canada’s ability to enter into trade agreements with other countries, which he said was contrary to Canadian sovereignty.

However, US Trade Representative Jamieson Greer instead blamed Canada for the failure of the agreement.

“This is a missed opportunity for Canada to partner with the United States,” Greer said.

According to him, Canada refused to finalise a trade agreement based on previously agreed terms.

“Although the US has offered Canada the best treatment compared to other major exporters entering our market, new demands and the withdrawal of a number of commitments by Canada have upset the balance achieved in recent days,” he said.

The new US tariffs will affect around 5% of Canadian exports to the US market, including electronic products, industrial machinery, and dairy products. This policy adds to the list of tariffs previously imposed by the US on Canadian steel, timber, and vehicles.

Trump first imposed tariffs on a number of key Canadian import products at the start of his second term last year. The move was met with retaliatory tariff policies from Ottawa.

Since then, the two countries have continued to engage in tit-for-tat trade policies, while Trump has repeatedly issued threats of new tariffs.

The Trump administration announced the 50% tariff in July after accusing Canada of “discriminatory treatment of American products”.

Previously, on Friday (22/8/2026), Trump had told reporters that a deal with Canada might still be possible, but by the time the deadline expired, no agreement had materialised.