**US-Canada trade tensions escalated sharply in 2026 under Section 338 authority, with 50% tariffs on roughly $20 billion of Canadian goods taking effect August 22 after bilateral talks collapsed.** Canada responded with matching counter-tariffs on $27.6 billion of US imports effective September 8, targeting steel, aluminum, dairy, appliances, and other sectors, followed by US modifications to tariff lists on September 15 and import bans on select Canadian products (including certain alcoholic beverages, dairy items, and motorcycles) effective September 29. These measures apply in addition to existing Section 232 duties and without USMCA exemptions for covered goods. Trader consensus on timing for further or broader tariff increases reflects the rapid tit-for-tat actions, stalled negotiations, and risks of additional escalation or policy adjustments amid ongoing bilateral friction.