A deal looked close on August 19. Two days later, negotiations broke down and the tariffs landed anyway.

Less than two hours before the U.S.'s new 50% tariffs were set to take effect on August 19, President Trump postponed them for three days, giving negotiators until August 21 to finalize what both sides had called a breakthrough. Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer had announced "significant progress" days earlier.

What actually happened

Negotiations broke down late in the day on August 21. The 50% tariffs took effect August 22 as originally scheduled, applying to roughly $27.6 billion in Canadian exports — dairy, alcohol, cement, building materials, clothing and a wide range of other goods, with no CUSMA exemption and no expiry date attached. Energy, potash, fish and critical minerals remain excluded.

A Capital Economics report published in the days before the deadline had already warned that the tariff escalation risked further stalling the broader CUSMA renegotiation, hurting business confidence and slowing growth beyond just the directly tariffed sectors. That warning has now proven accurate rather than speculative.