US Commerce Secretary accuses Canada of sabotaging trade talks with last-minute demands

The US-Canada trade relationship hit a new low in late August 2026. Commerce Secretary Howard Lutnick publicly accused Canada of deliberately derailing trade negotiations by introducing sweeping new demands at the eleventh hour, collapsing what had reportedly been an emerging framework for a deal. The fallout was immediate and expensive. The US responded by imposing new tariffs on roughly $20 billion worth of Canadian goods. Canadian Prime Minister Mark Carney promised a dollar-for-dollar retaliation, setting the stage for a genuine trade war between two countries that are each other’s largest trading partners. What actually happened at the negotiating table The critical window was August 22 through 25, when talks that had been inching toward agreement suddenly collapsed. According to Lutnick, Canada arrived with a set of demands that went well beyond the parameters both sides had previously agreed to work within. The new asks were specific and politically loaded. Canada pushed for tariff relief on medium and heavy-duty trucks, carve-outs for aluminum products, and protections for its dairy supply management system. Each of those items touches a nerve domestically for Canadian prod...