A 50% U.S. tariff on nearly $20 billion of Canadian imports is set to take effect on August 19, 2026 after Canada rejected Washington's latest counter-offer, leaving both sides far apart even as Prime Minister Mark Carney and President Donald Trump agreed in principle to intensify talks. The duties, announced on July 20 under Section 338 of the Tariff Act of 1930, would hit dairy products, alcoholic beverages and motor vehicles even though the targeted goods are described as compliant with USMCA, while energy exports, potash, fish and critical minerals remain exempt. The dispute adds to existing Section 232 tariffs on steel, aluminum and autos and raises the risk of retaliation, higher consumer prices and supply-chain disruption in North America's auto industry, where parts and vehicles cross the border multiple times before final assembly.