What triggered the breakdown of U.S.-Canada trade talks in late July 2025, and what immediate action did Canada take?

Talks to avert 50% U.S. tariffs on around $20 billion of Canadian goods broke down late on Friday (July 26–27, 2025), spurring Prime Minister Mark Carney to pledge retaliation. The breakdown followed Trump’s July 31 order raising tariffs on non-USMCA goods to 35%, but the immediate trigger cited in the timeline was the earlier collapse of negotiations over Canada’s digital services tax — which Trump abruptly ended in late June, prompting Canada to rescind the tax two days later in an effort to restart talks.

How did the U.S. and Canada escalate tariffs on steel and aluminum between February and June 2025?

On February 10, 2025, Trump signed orders imposing 25% tariffs on steel and aluminum imports from all countries, including Canada, effective March 12; on June 3, 2025, the U.S. doubled those tariffs to 50%. In response, Canada imposed 25% tariffs on C$29.8 billion of U.S. goods — including steel and aluminum products, computers, servers, display monitors, and sporting equipment — on March 13, the day after the U.S. metals tariffs took effect.

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Fentanyl, a Reagan Ad and a Near Deal: Trump's Trade War with Canada

Fentanyl, a Reagan Ad and a Near Deal: Trump's Trade War with Canada

FAQ