Canada walked away from tariff negotiations with the United States on August 21, 2026, launching the two countries into a new stage of their ongoing trade war. Canadian officials said the talks broke down due to last-minute changes to the deal, while US President Donald Trump has taken to his Truth Social platform to argue the historic economic relationship is unfair to the United States.
The steep US tariffs hit about $20 billion in Canadian goods -- about 5.5 percent of its exports to the United States -- after trade negotiations collapsed at the eleventh hour.
Canadian Prime Minister Mark Carney said in a statement late August 21 that the terms offered by the United States were "unfair, uneconomic, and called into question the reliability of any deal" (archived here).
Under Canada's planned response starting September 8, US steel and aluminum products previously subject to a 25-percent duty will soon face 50-percent tariffs.
Additional goods facing 25-percent tariffs include appliances, dairy products like cheese, as well as certain steel and aluminum derivative products.
Since the negotiations broke down, Trump has taken to his Truth Social platform to excoriate the Canada-US trade relationship. However, some of his complaints contain inaccuracies.
"Canada's Unemployment Rate is now at 10%, and rapidly rising," Trump wrote on Truth Social August 24.
Going off Statistics Canada's latest unemployment numbers, this is incorrect. Canada last reported an unemployment rate of 6.4 percent in July 2026 (archived here).
The most recent Canadian unemployment peak was 7.1 percent in September 2025. The country last reported a 10.1 percent unemployment rate in August 2020, during the height of the Covid-19 pandemic.
The United States uses a different method to calculate its unemployment rate than Canada (archived here and here). Statistics Canada often converts its data to align with US concepts.
Under this conversion, Canada most recently reported an adjusted 5.6 percent unemployment rate in February 2026, compared to 4.4 percent in United States reported by the US Bureau of Labor Statistics (archived here and here).
The United States' latest reported unemployment rate was 4.1 percent in July 2026 (archived here).
"Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots," Trump said in an earlier August 24 Truth post.
He brought up the "massive amount" of tariffs charged to American farmers in another post the day before. Trump has inaccurately referenced a steep tariff on milk for years and agricultural products have been a focus of the trade tensions with Canada.
AFP previously debunked social media posts which misleadingly claimed Canada charged over 200 percent tariffs for dairy products and over 100 percent for other agriculture products.
These claims miss the context of Canada's supply management system, which charges much steeper fees to specific exporters after they reach a certain import quota (archived here).
For example, Canada charges most milk products a 7.5 percent tariff but an over 200 percent tariff can kick in if a negotiated limit is exceeded (archived here).
However, as a signatory to the recently downgraded United States-Mexico-Canada trade agreement, American dairy products are exempt from the lower tariff and are only charged the higher duty if they surpass the exporter's limit (archived here).
Experts previously told AFP that Canada uses the progressive tariff system to avoid product surpluses within the country.
Trump went on to claim in the same August 24 post that Canada "has long created a 60 Billion Dollar Deficit between our two Countries."
Trade deficits occur when a country imports more than it is exporting to a particular nation.
AFP debunked the president's 2025 claims that the United States has an over $200 billion trade deficit with Canada. At the time, the US Trade Representative and US Census Bureau reported the trade deficit was $63.3 billion at the end of 2024.
And amid the past year's trade tensions, the deficit with Canada has dropped further.
The deficit with Canada was $48.3 billion at the end of 2025, according to the US Trade Representative and US Census Bureau (archived here and here).
The biggest factor in the imbalance is oil and gas exports from Canada, according to analysts (archived here, here and here).
US Census Bureau figures show the country's largest trade deficit is not currently with Canada, but with Vietnam at $114 billion for the first half of 2026 (archived here).
"WE DON'T NEED CANADA, THEY NEED US! They do 95% of their business with the U.S., with us, the exact opposite," Trump also claimed in the same August 24 Truth Social post.
Trump made the same claim last year, and AFP debunked it citing the 62.2 percent of Canada's total imports for 2024 coming from the United States, as reported by Statistics Canada (archived here). That year, the agency said 75.9 of Canada's exports went to the United States.
The United States remains Canada's top trading partner by a large margin, but as trade relations have cauterized, both import and export rates have gone down.
In 2025, Global Affairs Canada reported that United States products made up 46.2 percent of Canada's imports, while Canada sent 72.5 percent of its exports to its southern neighbor (archived here).
According to the US Census Bureau, Canada made up 12.6 percent of the United States' total trade in the first half of 2026, making it the country's second largest trading partner behind Mexico (archived here).
Read more of AFP's reporting on misinformation related to Trump here.