Retaliatory tariffs on roughly $20 billion in American goods are now in place, put there by Canada after trade talks with the United States broke down. A retaliatory tariff is a charge a government places on another country's imports specifically to answer trade penalties that country imposed first. Canadian trade negotiators left the United States last week without a deal that would have stopped President Donald Trump's new tariffs from taking effect.
Here is what that sequence looked like. Canadian negotiators traveled to the United States to reach an agreement before Trump's new tariffs locked in. Those talks did not produce a deal. The negotiators returned home. Canada then unveiled charges on roughly $20 billion in American goods.
A trade deal in this context means a formal agreement between two governments about the terms under which goods move across their shared border. The talks were meant to produce exactly that. With no such agreement signed, both countries are now running competing tariff measures at the same time, with no framework in place to resolve the dispute.
The logic behind retaliatory tariffs is deliberate: make the other side's exports more expensive inside your own market, create economic pressure on businesses that depend on access to it, and give those businesses a reason to press their government toward a settlement. Canada's $20 billion figure is the scale of that response.
The talks that might have prevented all of this ended last week in Washington, unsigned.