RESOLVING THE LEDGER
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Trade talks between the U.S. and Canada fell apart late Friday night, and both sides said steep new tariffs will go into effect.
Why it matters: It's an unprecedented breakdown in relations with the second-largest U.S. trading partner.
Catch up quick: Trump last month threatened to invoke Section 338 of the Tariff Act of 1930 to hit a slew of Canadian goods with additional 50% duties, including alcohol, hockey equipment, cement and dairy products.
No president has ever used Section 338 to impose tariffs since it became law in 1930.
The tariffs were scheduled to take effect at 12:01 a.m. ET Wednesday. The administration carved out key Canadian exports, including energy, potash and critical minerals, from the new tariffs.
On Tuesday, Trump postponed the tariffs for three days, saying the two sides had a deal.
Driving the news: They did not.
U.S. Trade Representative Jamieson Greer said late Friday that Canada had made last-minute demands that upset the pact, Bloomberg reported .
Canadian Prime Minister Mark Carney, in a statement posted to X, alleged it was the U.S. that had made late changes to the terms, and said he had decided to suspend the negotiations.
Friction point: "Canada will match those tariffs dollar for dollar to protect our workers and businesses," Carney wrote.
The exact shape of that retaliation was not immediately clear.
By the numbers: Trade between the two countries totaled $376 billion in the first half of the year, per Census data — double China and trailing only Mexico.
The bottom line: After more than a year of threatening various stronger tariffs against Canada, the U.S. is making its most aggressive move yet to actually impose them.
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