The United States and Canada are now locked in a full-scale trade war after talks collapsed late Friday night, sending 50% American tariffs into effect at midnight and prompting Canadian Prime Minister Mark Carney to vow dollar-for-dollar retaliation, NBC News reported. Carney called the breakdown a consequence of demands from the Trump administration that were, in his words, "uneconomic, unfair," and ultimately amounted to a bad deal Canada could not accept.
The rupture came after nearly two weeks of intensive negotiations and a false dawn on Tuesday, when President Donald Trump declared on social media that the two sides had reached a deal and paused the tariffs for three days, according to NBC News. Officials on both sides had expressed optimism as recently as Thursday, when Canada's trade minister met U.S. Trade Representative Jamieson Greer for several hours. That optimism evaporated by Friday night. "They asked too much, and they offered too little," Carney told reporters Saturday morning. The White House did not respond to NBC News' request for comment.
The U.S. tariffs affect approximately $20 billion worth of American imports from Canada, targeting hockey sticks, building materials, liquors, and certain clothing, per NBC News. Canada's retaliatory measures, set to take effect September 8, will impose 25% to 50% tariffs on nearly 900 American goods, with duties concentrated in steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, NBC News reported. Paper products are among the hardest-hit sectors, The Guardian reported, with Canada threatening 25% to 50% tariffs on toilet paper and facial tissue stock. The U.S. imported $328 million worth of toilet paper from Canada in 2024, making Canada by far the largest exporter of that product to the United States, according to World Bank data cited by The Guardian. American paper products, while often manufactured domestically, rely heavily on Canadian raw materials. Procter & Gamble, maker of Charmin, said last year it would raise prices amid earlier tariffs, The Guardian noted. Canadian whiskey brands Crown Royal and Canadian Club are currently subject to the 50% U.S. tariff on Canadian liquor, while most Canadian provinces have independently banned American alcohol in retaliation for earlier duties, The Guardian reported. Trump cited those provincial bans as part of his legal justification for the new tariff round.
Carney did not soften his language when asked Saturday whether Canada was effectively going to war. "Because we were attacked," he said flatly, per NBC News. The collapse represents a dramatic deterioration in one of the world's most integrated bilateral trading relationships, with consumer prices on both sides of the border — from bathroom staples to building materials — now directly in the crossfire. The Guardian noted that inflation anxieties are already running high among consumers in both countries.
Canada's retaliatory tariffs are scheduled to take effect September 8. Whether either government will return to the negotiating table in the interim remains unconfirmed.