US imposes 50% tariffs on $20bn of Canadian goods as Ottawa prepares retaliation

The United States has imposed 50% tariffs on about $20 billion of Canadian goods after negotiations between the two countries collapsed, prompting Ottawa to prepare retaliatory measures.

The tariffs took effect after talks broke down shortly before a midnight Eastern time deadline on Saturday, August 22, 2026. The affected Canadian products include wine, furniture, dairy goods, cement, clothing, fishing rods and hockey sticks, according to reporting in the AddisMizan source queue.

Canadian Prime Minister Mark Carney said his government had walked away because the proposed agreement was a bad deal and that last-minute US demands would have undermined Canadian sovereignty. Canada plans to match the measures “dollar for dollar,” with tariffs on US steel, electronics, dairy products, appliances, agricultural equipment, pulp and paper, and other goods due to take effect on September 8.

The new US duties cover roughly 5% of Canada’s exports to its southern neighbour and come in addition to existing levies on cars, aluminium, steel and lumber.

Financial markets registered an immediate response on August 24. The Canadian dollar weakened against the US currency after having strengthened on expectations that an agreement was close.

The dispute escalated despite public indications only days earlier that the two sides were nearing a deal to reduce tariffs on steel, aluminium and cars. The latest measures raise the prospect of higher costs for importers and consumers in both countries, though the eventual economic impact will depend on how long the tariffs remain and whether negotiations resume.

The core tariff figures and Canadian response were reported by both The Guardian’s business coverage and an Al Jazeera source item, providing two-source support for the central development.