US-Canada trade relations have deteriorated sharply in 2026 amid failed bilateral negotiations and reciprocal tariff actions. The United States imposed 50% Section 338 tariffs on roughly $20 billion of Canadian goods in August after talks collapsed, prompting Canada to enact matching retaliatory measures on US steel, aluminum, and other products effective September 8. The USMCA joint review concluded without renewal in July, leaving the agreement in force until at least 2036 but subject to annual scrutiny, with the next review due by July 2027. Primary sticking points include motor vehicles, dairy, autos, and third-country trade restrictions. Recent statements from both governments indicate stalled formal talks and ongoing economic pressure ahead of US midterms, though historical patterns show periodic pauses or limited sectoral understandings amid broader disputes.