Canada has halted trade negotiations with the US after rejecting proposed terms it deemed unacceptable, as Washington moves ahead with 50% tariffs on Canadian goods, while Canada prepares dollar-for-dollar retaliatory measures and accelerates efforts to diversify its economy.
Prime Minister Mark Carney announced on 21 August 2026 that Canada’s government has halted negotiations with the US following what it characterises as unfair last-minute changes to proposed trade terms. The decision came after the US announced plans to impose a 50% tariff on roughly USD 28 billion worth of Canadian goods, effective from 22 August.
Following the collapse of trade negotiations and the imposition of US tariffs, the Canadian government will also implement equal retaliatory tariffs dollar for dollar, a spokesperson confirmed. The suspension ends 18 months of active negotiation aimed at preserving tariff-free access for Canadian business, reducing US duties on key strategic sectors, and providing stability for small and medium enterprises.
Following his remarks, Carney announced that Canada’s tariffs on US products would come into effect on 8 September 2026.
Earlier, the Trump administration announced that it will impose 50% tariffs on nearly USD 20 billion worth of Canadian goods from 19 August 2026 under Section 338 of the Tariff Act of 1930. This included hockey equipment, clothing, cement, and beer, among others.
However, the US postponed the implementation of additional 50% tariffs on certain Canadian imports by three days to allow more time for ongoing trade negotiations; the tariffs were deferred until 22 August 2026 under a presidential proclamation issued on 18 August.
