For sixty years the two countries lowered the barriers between them until a car built in Ontario or Michigan was in practice built in both. In 2025 the United States put tariffs on Canadian goods, citing drugs crossing the border. In July 2026 it declined to renew the continental trade agreement its own president had signed in 2018, and in August, after talks failed, raised tariffs to fifty percent. Canada has answered each round with tariffs of its own, smaller because its economy is a tenth the size.
The wider rupture and each side's full account: The United States and Canada.
Where it stands · September 2026
Canada's retaliatory tariffs on American goods took effect on 8 September 2026. A day later the United States banned Canadian alcohol, dairy and motorcycles. On 17 September the American president threatened tariffs on the European Union over a Canadian association plan. On 29 September the American ban on Canadian imports took effect. Both sets of measures now stand.
What the dispute is about
The balance. America buys more from Canada than it sells, almost entirely because it buys Canadian oil, at a discount. In everything else it runs a surplus.
Protected sectors. Canada limits imports of milk, eggs and poultry with very high tariffs. America has taxed Canadian lumber on and off for forty years. Each calls the other's protection unfair.
The method. Whether a trade agreement means anything if one party can set it aside by declaring an emergency, and what a smaller partner can do when it does.
