A significant new tariff of 50% on approximately $20 billion worth of Canadian products went into effect Saturday after last-minute trade negotiations between the United States and Canada failed to reach an agreement.
US Trade Representative Jamieson Greer stated that Canada declined to finalize a trade deal despite an earlier US offer, citing "new demands and walk backs of other commitments by Canada" that disrupted the established balance. The tariffs target a range of goods including wine, hockey sticks, and cement, but will include exemptions for energy and essential items such as fish and critical minerals.
Canadian Prime Minister Mark Carney vowed a dollar-for-dollar retaliation to protect Canadian workers and businesses. "In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly $25 billion in support provided over the past 18 months," Carney said in a statement.
President Trump had initially set a deadline for Wednesday but extended it to Saturday amid eleventh-hour discussions. Administration officials indicated the new tariffs are intended to address Canada's alleged "substantial retaliation" and "discrimination" against American products.
Prime Minister Carney described the breakdown in talks as a result of "last-minute changes in the US proposed terms" that were "unfair, uneconomic, and called into question the reliability of any deal." He also noted a shift in global trade relationships, stating, "America has changed, and that we will not return to our old relationship."
President Trump had expressed optimism hours before the deadline, referencing his "good relationship" with Prime Minister Carney and indicating progress on a deal. He also alluded to concurrent negotiations with Mexico, asserting his intent to secure favorable terms for the United States in both situations.
The tariff imposition followed a period of intense and delicate negotiations. Sources indicated that the Trump administration was seeking an end to Canada's retaliatory measures, such as bans on U.S. liquor and duties on American automobiles. The dormant Keystone XL pipeline project was also reportedly part of the discussions.
Canada, meanwhile, had sought reductions in U.S. tariffs on automobiles and other goods. Specifically, Ottawa aimed to lower the U.S. tariff on Canadian-built vehicles to 15% from 25% and halve the levy on Canadian steel and aluminum to 25%.
Canada is the United States' second-largest trade partner, with nearly 72% of Canada's goods exports directed to the U.S. in the previous year. The U.S. goods trade deficit with Canada was $46.4 billion in 2025.
The administration's move comes after the Supreme Court in February struck down the president's previous sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA). For the current tariffs on Canada, the Trump administration invoked Section 338 of the Tariff Act of 1930, a seldom-used law from the Great Depression era that allows the president to impose tariffs of up to 50% on imports from countries deemed to have discriminated against U.S. businesses, without requiring a trade investigation and with no time limit on their duration.
Trump has accused Canada of discriminating against American exports in sectors including cars, alcohol, and cheese. Canada and China were the only countries to impose retaliatory tariffs against the U.S. in response to earlier levies.