President Donald Trump has intensified a trade confrontation with Canada after broader talks collapsed on August 21, accusing Ottawa of unfair treatment of US industries and threatening further import bans. The United States imposed 50% tariffs on about $20 billion of Canadian products, while Canada retaliated with duties ranging from 15% to 50% on roughly $20 billion of US exports. Trump has also threatened to cut Canadian companies off from US government contracts and invoke Section 338 to ban products including motorcycles, some dairy goods and most alcoholic beverages, with some measures scheduled for September 29. The dispute threatens the USMCA, which supports integrated North American automotive, agricultural, steel and aluminum supply chains, and could carry political risks for Republicans before November’s midterm elections. Canada’s overall trade equals 64% of its economic output, compared with 25% for the United States, yet Oxford Economics estimates its effective tariff on US imports at about 2.4%, below the 5% US rate. Canada protects sectors including dairy, where tariffs can exceed 200% after quotas are reached, but US dairy exports rose more than 11% last year after increasing 8% in 2024. The United States also runs a dairy trade surplus with Canada, while its overall deficit is largely driven by Canadian crude oil exports, which exceeded $85 billion in 2025. Prime Minister Mark Carney says Canada remains open to a fair agreement, and the delayed import bans leave time for negotiations.