Canada's retaliatory tariffs of up to 50 percent on about $20 billion in U.S. goods are set to take effect just after midnight Eastern time on Tuesday, following the breakdown of trade talks. Prime Minister Mark Carney announced the measures after withdrawing Canadian negotiators from Washington, citing U.S. tariffs on Canadian steel, aluminum, and automobiles. Polls show strong Canadian support for Carney’s stance, though concerns remain about escalation.

President Trump has threatened further tariffs and even ending trade with Canada, while U.S. officials like Treasury Secretary Scott Bessent argue Canada is too small to engage in a tit-for-tat conflict. Canadian industry leaders, including Flavio Volpe of the Automotive Parts Manufacturers’ Association of Canada, warn of mutual harm. The tariffs target goods such as clothing, wood products, and pencil erasers, with some items removed after industry feedback.

Carney emphasized diversifying trade and reducing reliance on U.S. negotiations, stating talks will happen "at the appropriate time".