Story summary
The United States and Canada have been engaged in a trade war for several months. On Tuesday, Canadian retaliatory tariffs came into effect**, targeting U.S. goods worth $27.6 billion, with duties ranging from 15 to 50%. The move was in response to the Trump administration's imposition of tariffs on Canadian goods worth nearly $28 billion under Section 338 of the Tariff Act of 1930.
In response, the U.S. President Donald Trump banned the import of various Canadian products, including alcohol, motorcycles, and dairy products, starting from September 29. The ban also includes 50% tariffs on a series of other products, such as paper and wood products, aluminum products, furniture, and mattresses.
The trade war has led to a decline in tourism between the two countries, with Canadians choosing to avoid traveling to the U.S. due to the tensions. As one marketing executive based in Vancouver said, "It's such a big ask right now... It's just a wasted effort."
Canada's Prime Minister Mark Carney has defended the country's decision to retaliate against the Trump administration's tariffs, saying that Ottawa will not back down and warning of tough times ahead for Canadians. A recent poll found that 80% of respondents support or somewhat support dollar-for-dollar countertariffs.
The trade war between the U.S. and Canada is an escalation of tensions that began last month when trade talks collapsed. The dispute has led to economic pain on both sides, with Canadian businesses affected by the tariffs and American tourism organizations trying to woo Canadians back to visit the United States.
Written for “US Canada Trade War Escalation” on 2026-09-09,
grounded in this article and the 55 other(s) covering the same event.
Things appeared to escalate again, this time over Canada’s decision to recognize Palestine as a state.
asserted
Things → appear → state
In response to this, Trump posted, “Wow! Canada has just announced that it is backing statehood for Palestine.
asserted
it → post → Palestine
That will make it very hard for us to make a Trade Deal with them.”
asserted
us → make → them
July 31, 2025
Trump signed an executive order raising tariffs from 25 to 35 per cent (not affecting CUSMA products) as he had previously warned if Canada did not meet the deadline.
Aug. 1, 2025
Aug. 21, 2025
Aug. 22, 2025
Carney announced that, as of Sept. 1, the Canadian government would “now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under CUSMA.
asserted
government → sign → CUSMA
At the time, Trump said, “I like Carney a lot, I think he’s a good person and we had a very good talk yesterday, so I think it’ll be good.”
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it → say → talk
Trump likely felt this was fairer, because with the exception of the targeted sectoral tariffs on autos, steel and aluminum, the U.S. had not tariffed goods that were part of CUSMA, as Canada had done.
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Canada → feel → CUSMA
A reporter asked Carney at this time what happened to elbows up.
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what → ask → elbows
Carney replied with another hockey metaphor that suggested he thought taking extra penalties wasn’t the right thing to do.
uncertain
taking → reply → penalties
Aug. 29, 2025
Sept. 29, 2025
Oct. 7, 2025
Carney attended a second Oval Office meeting.
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Carney → attend → meeting
Trump made it clear he was open to renegotiating or making different deals.
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he → make → deals
Carney reportedly was looking for relief on tariffs in specific sectors (Section 232) on things like steel and aluminum, which were tariffed at 50 per cent.
uncertain
which → look → cent
Canada-U.S. Trade Minister Dominic LeBlanc called the talks both “successful” and “positive.”
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LeBlanc → call → talks
Things looked hopeful.
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Things → look → ?
According to U.S. Ambassador to Canada Pete Hoekstra, as part of a potential deal, Carney had offered to double oil experts to the U.S.
uncertain
Carney → accord → U.S.
Reportedly, Keystone XL and defence were discussed, and Carney told reporters at the time that he and Trump had “identified opportunities for material progress in trade in steel, aluminium and energy.”
uncertain
he → discuss → steel
Trump cancelled negotiations after an Ontario anti-tariff ad featuring former U.S. president Ronald Reagan aired during two baseball games.
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ad → cancel → games
Reportedly, talks broke down, not just because of the ad.
uncertain
talks → break → ad
White House spokesperson Kush Desai called the ad the “latest example of how Canadian officials would rather play games than engage with the administration,” and the director of the National Economic Council, Kevin Hassett, accused Canada of having a “lack of flexibility,” suggesting it was “leftover behaviours from the Trudeau folks.”
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it → call → folks
Carney apologized to Trump for the ad at a dinner at the Asia Pacific Economic Cooperation forum in Gyeongju, South Korea.
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Carney → apologize → Gyeongju
The Government of Canada told The Canadian Press that talks had not resumed after the apology, and that Canada was ready to pick up where they left off.
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they → tell → apology
Meanwhile, Ontario Premier Doug Ford was framing the ad as a victory: “We’ve achieved our goal, having reached U.S. audiences at the highest levels.”
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We → frame → levels
Reaching U.S. audiences might be helpful if your goal is to have an effect on an upcoming U.S. election, not secure a sensitive trade deal.
uncertain
goal → reach → deal
Carney, Mexican President Claudia Sheinbaum and U.S. President Donald Trump met privately and sat together at the FIFA World Cup draw that took place at the John F. Kennedy Center in Washington, D.C.
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that → meet → Washington
The Prime Minister’s Office said they had at least one 45-minute discussion and “agreed to keep working together on CUSMA.”
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they → say → CUSMA
Trump told reporters that all three of them were also going to discuss immigration and trade.
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three → tell → immigration
U.S. Trade Representative Jamieson Greer told Fox Business that it was Canada that was maintaining barriers that were making the talks difficult: “They continue to have certain barriers.
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They → tell → barriers
They refuse to sell U.S. wine and spirits on their shelves.
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They → refuse → shelves
There are a variety of issues that they have not addressed and they aren’t addressing, and this makes it a big challenge and an obstacle for starting real negotiations with them.”
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it → be → them
March 6
Four months later, LeBlanc met Greer in Washington, D.C., to discuss the upcoming CUSMA review on July 1.
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LeBlanc → meet → July
Greer’s office released a report outlining trade irritants with Canada, noting that Trump wanted U.S. alcohol to “immediately and permanently” return to shelves in all provinces.
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alcohol → release → provinces
It also cited concerns with “Buy Canadian” policies, high tariffs on U.S. dairy and concerns about delays with aircraft validation in Canada.
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It → cite → Canada
The Canadian Press reported that Carney never had an official meeting with Trump during the G7 summit in France, but told the press he’d had seven or eight discussions with him and got him a birthday present that he liked “a lot.”
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he → report → that
But no official bilateral talks were had between the two.
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talks → have → two
Meanwhile, Canada had recently agreed to reduce its tariffs on Chinese EVs from 100 to 6.1 per cent, capping vehicles annually at 49,000, while China suspended its retaliatory tariffs on Canadian agricultural goods.
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China → agree → goods
July 1
July 19
July 20
This brings us up to the most recent failed negotiations.
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This → bring → negotiations
Curiously, Carney told reporters at the the press conference for the Churchill Falls deal that, “The most important thing happening this week in Canada is today’s announcement,” which was interesting, seeing as we all knew U.S. trade talks were happening and no one had walked away at the point.
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one → tell → point
I contacted his office to ask about the remark and other details about the deal.
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I → contact → deal
I never received a response.
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I → receive → response
Before talks broke down, it looked like things were going well.
asserted
things → break → ?
On the evening of Aug. 18, Trump exuberantly declared on Truth Social that Canada and the U.S. had a “DEAL” (pending finalized documents) and that Keystone XL “may be awoken from the grave!”
uncertain
XL → declare → grave
…and 38 more, not listed.
