Canada-US Trade Talks Collapse, 50% Tariffs Hit Both Sides

Trade negotiations between the United States and Canada collapsed over the weekend, with both governments subsequently pledging to impose 50% tariffs on each other's products. The breakdown has sent shockwaves through small businesses on both sides of the border, many of whom fear the tariffs will wipe out a significant portion of their revenues.

Small Businesses Count the Cost

Among those directly affected is Cindy Baldassi, owner of CindyLouWho2, a stone-and-glass jewellery business based in Calgary, Alberta. Some 75% of her sales come from American buyers, and the new tariffs mean she will need to add 50% to the price of most items she sells to US customers to remain viable. "It's quite likely that it will wipe out most of my US sales," Baldassi told the BBC. "I expect that at least half of my business will be gone."

Similar fears are being felt across the border in the United States. Lind Furniture, a nearly six-decade-old manufacturer in Ontario, has been watching sales decline since Trump returned to the presidency. "As soon as there were tariffs in the air, people put purchases on hold," said Michael Saifer, the company's general manager.

What the Tariffs Cover

On the Canadian side, Prime Minister Mark Carney announced levies starting on 8 September targeting US steel, dairy products, appliances, and electronics. Trump's tariffs, which came into effect on Saturday, hit Canadian wine, dairy, cement, clothing, and hockey equipment.

Canada has had on-again, off-again experience dealing with tariff threats since Trump first took office in 2025. Nevertheless, the latest 50% level is seen as unprecedented in its potential to harm integrated North American supply chains, which have developed over decades under successive free trade agreements.