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AXIOS (Ben Berkowitz) - U.S.-Canada trade talks collapse, massive tariffs to take effect Sat Aug 22 05:05:18 2026

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. - No president has ever used Section 338 to impose tariffs since it became law in 1930. - The tariffs were scheduled to take effect at 12:01 a.m. ET Wednesday. The administration carved out key Canadian exports, including energy, potash and critical minerals, from the new tariffs. - On Tuesday, Trump postponed the tariffs for three days, saying the two sides had a deal. Driving the news: They did not. - U.S. Trade Representative Jamieson Greer said late Friday that Canada had made last-minute demands that upset the pact, Bloomberg reported . - Canadian Prime Minister Mark Carney, in a statement posted to X, alleged it was the U.S. that had made late changes to the terms, and said he had decided to suspend the negotiations. Friction point: "Canada will match those tariffs dollar for dollar to protect our workers and businesses," Carney wrote. - The exact shape of that retaliation was not immediately clear. 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.