Canada retaliates as trade war with U.S. escalates

Account subscription benefits alongside Premium Stories, Editorials, Opinions and more. Unlock these with Subscription

Canadian Prime Minister Mark Carney announced retaliatory tariffs on the United States on Saturday (August 22, 2026), after walking away from a “bad deal” on trade in a deepening rift between the longtime allies.

Negotiations between the neighbouring countries broke down on Friday (August 21, 2026) in Washington, putting into force new 50% U.S. tariffs impacting about $20 billion worth of goods, or 5.5% of Canadian exports to the United States.

“You’re at war when you get attacked. We got attacked,” Mr. Carney said.

U.S. President Donald Trump had said Washington “should be able to have a deal with Canada,” citing his “good relationship” with Mr. Carney.

But on Saturday (August 22, 2026), Canada’s Prime Minister said Mr. Trump set conditions that were ultimately unacceptable even though earlier talks had been positive.

“In recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,” Mr. Carney said in Ottawa.

“We cannot accept what they’ve offered, and we will not give what they’ve asked.”

New Canadian tariffs will notably target the U.S. steel and dairy industries and take effect on September 8. More details would come next week, Mr. Carney said.

A senior U.S. official characterised this week’s talks in Washington as candid and not acrimonious.

U.S. Trade Representative Jamieson Greer told Fox News on Saturday (August 22, 2026) that Washington was “moving forward with measures that respond to Canadian retaliation.” He also said no new talks were planned with Canadian negotiators.

Canada has been seeking relief from Mr. Trump’s tariffs on autos, steel and aluminium, which have battered the country’s economy, forced job losses and strained what was once an iron-clad trade relationship.

The White House had alleged “discriminatory treatment” by Canada against U.S. alcohol, automobile and dairy products in introducing the duties.

They were originally set to take effect Wednesday (August 26, 2026), before Mr. Trump issued a three-day reprieve citing progress in talks.