Recent U.S.-Canada trade talks collapsed in late August 2026 after both sides accused the other of last-minute changes, triggering 50% U.S. Section 338 tariffs on roughly $20 billion of Canadian imports effective August 22, followed by Canadian retaliatory surtaxes of 15-50% on about C$27.6 billion of U.S. goods from September 8 and U.S. import bans on select Canadian products from September 29. These measures build on prior Section 232 steel and aluminum tariffs and occur alongside the July 2026 USMCA joint review, where the United States declined to extend the agreement in its current form, initiating annual reviews through 2036. President Trump has stated expectations that Canada will drop retaliatory measures within weeks, while comments from officials highlight potential bilateral deals on autos, metals, and dairy that could precede broader USMCA modernization before the 2028 U.S. election cycle. U.S. Trade Representative consultations ahead of the 2027 review and November 2026 midterms represent near-term focal points for any de-escalation.