Tangle - The U.S.–Canada trade war escalates.

Episode Date: August 24, 2026

On Saturday, the United States imposed 50% tariffs on roughly $20 billion of Canadian goods, including lumber, dairy products, clothing, and alcohol. Canadian Prime Minister Mark Carney said that Canada would match the U.S. tariffs “dollar for dollar,” with retaliatory duties set to begin on September 8. Though Canada has not officially released information on its tariff plans, Carney said the duties would target U.S. “steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.” On Monday, U.S. President Donald Trump wrote on Truth Social that the U.S. would increase tariffs on “all Cars, Trucks, both large and small, Automotive Parts, and Steel” to 50% on January 1, 2027.. Ad-free podcasts are here!Get 20% off your first year of ad-free episodes, exclusive interviews, and deep dives with Tangle’s podcast membership!The verdict on DOGE.In Friday’s members-only edition, Executive Editor Isaac Saul published an in-depth retrospective on the Department of Government Efficiency (DOGE) roughly one month after it formally shut down. Isaac explored whether DOGE followed through on its core promises of reducing government spending and improving efficiency, while also documenting the ripple effects of its harder-to-quantify actions. You can read the piece here.You can read today's podcast⁠ ⁠⁠here⁠⁠⁠ and today’s “Have a nice day” story ⁠here⁠.You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here. Take the survey: When do you think the U.S. and Canada will reach a trade agreement? Let us know.Our Executive Editor and Founder is Isaac Saul. Our Executive Producer is Jon Lall.This podcast written by: Will Kaback and audio engineered and edited by Dewey Thomas. Music for the podcast was produced by Diet 75.Our newsletter is edited by Managing Editor Ari Weitzman, Senior Editor Will Kaback, Bailey Saul, Audrey Moorehead, and Carina Pacheco. Hosted on Acast. See acast.com/privacy for more information.

From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle podcast, a place where you get views from across the political spectrum, some independent thinking, and a little bit of our take. I'm your host today, Senior Editor Will K back, and I hope your Monday is off to a great start. We've got a packed edition today, so let's jump right into it. Our main story is one you probably heard a little bit about over the weekend toward the end of last week. And that's the breakdowns in trade negotiations between the U.S. and Canada, which led to a new round of tariffs over the weekend and the promise of more to come in the weeks and months ahead. We're also going to stay on the tariff theme and talk about the status of tariff refunds in today's reader question. And then hopefully we can wash it down with a feel good news story about how NASA is extending the long.

life of the Voyager 1 and 2 missions. On a separate note, our Friday edition, which was Isaac's in-depth retrospective on the Department of Government Efficiency, has driven over 400 comments on the website. It spurred a ton of discussion across our platforms, and hopefully if you had a chance to check that one out, you were able to engage in a bit of that as well. If you haven't had a chance to check that out yet, in the piece, Isaac explores Weather Doge followed through on its core promises of reducing government spending and improving its efficiency and also document some of the ripple effects of its harder to quantify actions. So I wanted to offer one more plug for that Friday edition.

If you haven't listened yet, go back and check it out now. All right, now I'm going to pass it over to Audrey to get us into today's topic. Thanks, Will. Let's get into today's quick hits. Number one, President Donald Trump said the U.S. will exempt up to 300,000 metric tons of ground beef imports from tariffs for the next three months. claiming that the beef will be sold at 25% below current market prices. Number two. Supreme Court Chief Justice John Roberts issued an administrative stay of a lower court ruling that had suspended construction of President Trump's White House ballroom.

The decision will allow above-ground construction to continue while the court considers the legal challenge to the project. Number three. The Iranian Rial dropped to a record low of $2.02 million to the U.S. dollar. the Trump administration plans to announce new economic sanctions on Iran on Monday. Number four, a federal judge struck down the Trump administration's planned ban on visas for immigrants from 75 countries, finding that Secretary of State Marco Rubio did not have the authority to impose the ban. Number five, Democratic Mayor Eddie Melton of Gary Indiana said that approximately 9,000 residents

remain without power nearly two weeks after a storm knocked out power to the area. Indiana's Republican Governor Mike Brown criticized the Northern Indiana Public Service Company for delays in their response. Separately, we have a correction from last week. In Thursday's podcast on President Trump's vaccine executive order, we listed Michael Steele under what the left is saying. While Steele is a frequent critic of the president and endorsed Joe Biden in 2020, he was the former chair of the Republican National Committee, served as lieutenant governor of Maryland as a Republican and still considers himself a member of the GOP. Under our categorization standards, we should have listed him under what the right is saying and used a different piece for the left.

This is our 158th correction and tangles 367 week history in our first correction since May 14th. We track corrections and read them out in the podcast in an effort to maximize transparency with readers. Tensions between neighbors are at a new modern high as President Trump imposes 50% tariffs on a variety of Canadian imports. The talks collapsing late Friday. the Canadians walking out of negotiations with the U.S. We cannot accept what they've offered, and we will not give what they've asked. The Trump administration pointing to bans on the sale of U.S. alcohol in Canada, along with protections for Canadian dairy farmers. We're moving forward with measures that respond to Canadian retaliation.

North of the border, leaders are rallying around the Maple Leaf and blasting President Trump. You can't be trusted. Simple as that. On Saturday, the United States imposed 50% tariffs on roughly $20 billion worth of Canadian goods, including lumber, dairy products, clothing, and alcohol. Canadian Prime Minister Mark Carney said that Canada would match the U.S. tariffs dollar for dollar, with retaliatory duties set to begin on September 8th. Though Canada has not officially released information on its tariff plans, Carney said that the duties would target U.S. steel, dairy, appliances, agricultural equipment,

pulp and paper and electronics. On Monday, U.S. President Donald Trump wrote on Truth Social that the U.S. would increase tariffs on, quote, all cars, trucks both large and small, automotive parts and steel, end quote, to 50% on January 1, 27. For more context, the United States and Canada have been engaged in an intermittent trade war since February 2025, when President Donald Trump first signed an executive order imposing 25% tariffs on most Canadian goods in response to the country's alleged role in fentanyl trafficking and illegal immigration. Canada issued retaliatory tariffs before both countries agreed to a one-month pause. Throughout 2025, the U.S. tariffed specific commodities, including steel, aluminum, and copper, and imposed 35 percent duties on an array of Canadian goods. Canada has imposed similar tariffs in retaliation. A Supreme Court ruling invalidating President Trump's reciprocal tariffs blocked the generalized import duties on Canadian goods, but it did not affect the more targeted tariffs on specific sectors.

In March 2025, the U.S. and Canada agreed to tariff exceptions for certain goods covered by the U.S.-Mexico-Canada Agreement, or U.S.MCA, a trade deal negotiated during President Trump's first term. At a July 1st meeting, the U.S. declined to renew the U.S.MCA for another 16 years, meaning that the agreement remains in effect but will be subject to more frequent reviews and renegotiations. In late July of this year, the White House announced 50% tariffs on Canadian goods, including goods previously exempt, by the USMCA that would go into effect in mid-August. President Trump claimed that Canada had unfairly discriminated against American producers, and he enacted the new tariffs under Section 338 of the Tariff Act of 1930. Following the announcement, Canadian Prime Minister Mark Carney agreed to direct negotiations with the United States.

On August 19th, President Trump delayed the imposition of tariffs for three days, claiming a deal with Canada was imminent. However, Canada withdrew from negotiations on Friday, citing last-minute demands from the U.S. that Prime Minister Carney called, quote, unfair, un-economic, and called into question the reliability of any deal, end quote. On Saturday, after U.S. tariffs went into effect, Carney claimed in a press conference that the U.S. had attacked Canada and the two countries were at war over trade.

U.S. trade representative Jameson Greer said in a Saturday interview that there are currently no plans for the two countries to resume negotiations. Next up, you'll hear from the right, left, and Canadian writers on the latest round of tariffs. Then, Senior Editor Will Quebec will give his take. We'll be right back after this quick break. First up, what the right is saying. The right is mixed on the new tariffs, with some saying Trump is balancing the trade scales.

Others suggest the president is pursuing tariffs to his and the country's detriment. In PJ Media, Catherine Salgado said the Trump administration corrects the record on Canadian tariffs. Negotiations for a trade agreement collapsed between Canada and the United States as the former demanded a continuation of an agreement rigged in its favor, and the U.S. was not willing to continue providing all the favors while receiving none. The Canadians, like American leftist media and other foreign powers, are counting on Americans not knowing that foreign countries habitually impose extortionate tariffs on American goods,

but lose their minds whenever America tries to impose any tariffs on foreign goods. For decades, this completely lopsided and unjust system has been boosting the economies of other nations at Americans' expense, even as foreign goods flood into our market and help undermine our industry. For example, Canada has a long-standing tariff of 250% or above on certain American dairy products. The Trump administration is trying to correct all this. Despite having the most favorable access to the United States market of any other country and receiving the most friendly propositions from the Trump administration,

including tariff reductions on goods such as steel and lumber, Canada keeps making the foolish decision to throw tantrums. The Wall Street Journal editorial board argued, Trump's decision to escalate a tariff brawl with Canada makes no economic or political sense. Trump cited longstanding grievances over how Canada treats U.S. dairy. Press reports say the Trump team raised other issues during recent negotiations, including Canada's treatment of U.S. tech companies and digital taxes.

Most of these issues could have been addressed as part of a renegotiation of the U.S.-Mexico-Canada agreement. But Mr. Trump doesn't want to update the deal. He wants to rewrite it. unilaterally. As Mr. Carney noted Saturday, the president has contrived an array of pretexts from fentanyl trafficking to trade deficits to bludgeon Canada with tariffs. Mr. Trump's latest round of border taxes will hit an array of consumer goods, construction materials, and manufacturing components. Republicans are already getting pounded on the campaign trail over his tariffs and inflation. One reason for Mr. Trump's frigid approval rating is that voters believe Mr. Trump is

waging blunderbuss wars without a strategy and on trade, they're right. Now what the left is saying. The left opposes the tariffs, and many say Trump is damaging America's global standing. Others note Canada's tenuous position in the negotiations. In his substack, Robert Reich wrote, Trump declares war on Canada. The very idea of a trade war with Canada, our neighbor, our ally, our closest friend, a nation that's peaceful and whose people have a reputation for kindness, is absurd. But Trump is doing it anyway. The obvious effect will be to make it more expensive to build how, houses in the United States. Coupled this with the rise in long-term interest rates, i.e. mortgage interest rates, courtesy of Trump's war spending, his tax cuts mainly for the rich and big corporations, and the giant corporate AI debt encouraged by Trump, and the result will be to make housing

even less affordable than it already is. This is another example of Trump's perverse rage. I say perverse because I've come to believe that his insanity is expressing itself in ways deliberately contrary to what's expected of a president of the United States, ways considered wrong, if not stupid by most serious observers, which makes him want to do it all the more. He's lost his war in Iran. Most Americans are struggling financially. His mass deportations are unpopular.

So what does he do? He flips the finger at Canada because Canada is exactly the kind of nation that an American bully targets. The economist suggested the costs of defying Donald Trump are mounting for Canada. Carney is governing through paradox. Canada's largest trading partner, the United States, is led by an unreliable man who uses trade barriers as a weapon. For Canada, diversification of trade partners is wise, but takes time.

Building infrastructure needed to serve new markets requires significant investment. And yet little would do more to get that investment flowing than a trade deal with the United States. The plan seems to be to buy time and to keep negotiating. The political risk that comes with signing a trade deal that can Canadians cannot stomach is far higher than that for Mr. Trump's tariffs. But however bad Mr. Trump's deal might have been for Canada in the long run,

declining it and letting new tariffs come into force will hurt in the short term. The Canadian economy at last grew by 0.8% in the second quarter of this year, having contracted and stagnated in 2025 after the first round of tariffs. Unemployment hit a two-year low of 6.4% in July, but inflation was creeping up. Mr. Carney must hope that American politics and its own cost of living issues exacerbated by higher prices on Canadian imports, push Mr. Trump back to the negotiating table with a mind at last to give Canada some stability. Finally, what Canadian writers are saying? Canadian writers strongly criticized the Trump administration,

with many saying Carney was right to reject a lopsided deal. Others contend that Trump's posturing has made negotiating impossible. In the Globe and Mail, Tony Keller argued no deal was better than this deal. The Carney government ultimately decided to call Mr. Trump's bluff in the hope that doing so can pave the way to a less bad outcome. There will be short-term pain. There may be long-term pain, but there is no zero-paying all-gain option on the table. Mr. Trump has never offered a return to tariff-free trade between our two countries. That's not what he's after. The talks were about how much higher U.S. tariffs would go relative to the pre-2020-status quo of near-zero tariffs, and what Canada would give and get and return. The past month of Canada-U.S. negotiations were about how much more

unfavorable of a trade relationship we could be forced to accept. The White House was pushing to see how much higher a tariff barrier Canada would agree to relative to pre-20205, and what we'd concede to avoid even worse. Calling Mr. Trump's bluff has pushed the matter onto the front page in the top of the news hour. Our best path of persuasion is at the back door of the White House, through pressure brought by American businesses, American politicians, and American voters. In the Toronto Star, Jim Coyle said, An Honorable Deal with Donald Trump is all but impossible. Trade agreements are excruciatingly complex documents,

but values and principles are clear. The reality is that it was likely all but impossible to make an honorable pact with the U.S. administration that trades in dishonor, deceit, disrespect, bullying, abuse, and irrational lurches in position from day to day and moment to moment. It was clear, the Prime Minister said that, President Donald Trump, America's signature was written in pencil. What sentient member of the human race paying attention over recent years would not agree?

How does anyone deal samely, after all, with a president who has, at various times, based his tariff truculence and hostility to Canada on cross-border fentanyl smuggling, or TV ads featuring former President Ronald Reagan, or smoke from wildfires, or provincial refusal to stock American alcohol, or whatever other figment flickers across his consciousness on a given day? What America wanted amounted to Canadian concessions on autonomy and the capacity to execute decisions on its own trade policy. As the Prime Minister said, the question was clear, were we or were we not masters in our own house?

That's it for the right-left in Canadian writers. Now I'll pass it back to Will for his take. Thanks, Audrey. All right, here's my take. We've written the tariff roller coaster for so long now, particularly with Canada, that it's difficult to follow where exactly the latest twist sits on the broader track. The ride felt near the end after the Supreme Court's ruling in February, but the past month has demonstrated that it's far from over.

And at present, the U.S.-Canada trade relationship has degraded to what could be an all-time low, and it's fair to wonder whether this latest round of hostilities can actually make anything worse. Unfortunately, I think it can. To start, two points of context are key for understanding why these negotiations appear to have broken down and opened a new front in the trade war with our northern neighbor. First, the justification for the tariffs, Section 338 of the Tariff Act of 1930, is new. The law permits the president to tax countries deemed to be engaging in discriminatory trade practices, though no president has invoked the power. before now. This avoids the Supreme Court's block on tariffs issued under the International Emergency Economic Powers Act, while also applying to imports under the U.S.-Mexco-Canada agreement

that Trump had previously left untouched. Now, the new duties are certain to face legal challenges and opinions vary on whether they'll stand up in court, but the tariffs will likely be in effect during the months or years ahead spent litigating this question. Second, the Trump administration has consistently taken antagonistic stances toward our historical allies, particularly Canada. Consider just a few of the most notable barbs. President Trump has made frequent allusions to making Canada the 51st state and said, quote, Canada lives because of the United States. He has accused Canada of playing a, quote, central role in trafficking fentanyl into the United States, despite less than 1% of fentanyl in the U.S. coming from Canada.

And he has not hesitated to escalate his economic threats, calling that U.S.-Mexico-Canada agreement, which his first administration negotiated, quote, irrelevant and deciding not to renew it in July. As Jim Coyle wrote under what Canadian writers are saying, these direct provocations with Canadians will impede, if not prevent, any good faith negotiation. Against that backdrop, I'm not surprised that the prospective deal fell apart on Friday,

despite reports earlier in the week that it was on track. We don't know exactly what derailed the discussions. Auto industry tariffs were reportedly a sticking point, but Carney also alluded to U.S. threats on, quote, the French language and Quebec culture and Canadian culture. Whatever the reason, though, it's almost beside the point. The past year and a half of U.S. insults, gamesmanship, and posturing set the stage for this latest blow up.

So where does that leave us? Well, President Trump isn't making up long. longstanding trade barriers with Canada. The country has put in place its own tariffs to protect select industries. Specifically, it uses a tariff rate quota system for its dairy, chicken, turkey, and egg industries, imposing duties of up to nearly 300% on these products after an import quota is met. This quota system has been at the center of U.S.-Canada trade disputes, going back decades, including negotiations over the USMCA and even the North American free trade.

agreement. Separately, the U.S. International Trade Administration has identified trade barriers involving alcohol sales and raised technical concerns about how Canada regulates certain products. Trump isn't the first president to object to Canada's trade practices either. Presidents George W. Bush and Barack Obama each tussled with the country over lumber. But the obvious difference between those administrations and this one is the scope of the response, where Bush and Obama raised targeted objections, Trump has indicted Canada's entire approach to trade. Where past administrations worked through diplomatic channels, Trump has litigated the dispute in public. Where it was once unthinkable that trade disagreements could endanger the broader U.S.-Canada relationship,

our president is now lobbying disparaging comments about annexation, and the Canadian Prime Minister is giving speeches about the end of the U.S.-led world order. Now, I'm not saying that past approaches were perfect. Evidently, they did not resolve underlying trade issues, which points to the challenge of addressing those root problems and navigating constantly shifting trade dynamics across administrations. Trump may have even been directionally correct that a more aggressive, less diplomatic posture was necessary to shake things up. But in practice, this approach has taken the form of bullying, antagonism, and coercion. And now we can see exactly where that's led us. The path of mutually assured harm is now laid out before us.

These specifics of Canada's retaliatory tariffs are still to be announced, but the U.S. duties now in effect seem designed to hurt as many Canadian exports as we can. That includes everything from houseplants, honey, and hockey pads, to milk and molasses, to beer, brandy, and basketwork. And remember, these are all in addition to the existing mutual tariffs on aluminum steel, automobiles and more. And now as of this morning, Trump is threatening to increase many of those existing duties to 50% on January 1st, 27. So yes, things can and may very soon get worse. Still, I retain some hope, maybe you could call it fantasy or naivete, that each side will find a way to back down

before those worst consequences begin. Even though these negotiations have been dominated by personal animus, the economic realities of an all-out trade. trade war could have a sobering effect when that time actually comes. As the economist noted under what the left is saying, Canada struggled with growth, inflation, and unemployment last year as a result of new U.S. tariffs, and cost of living issues remain prominent. Meanwhile, in the U.S., the Federal Reserve estimated in April that tariffs implemented through November 2025, raised personal consumption expenditure prices for core goods by 3.1% through February 2026. That isn't entirely due to goods subject to Canadian tariffs,

but a separate analysis by the Bank of Canada found that the price of those goods outpaced that of non-tariffed goods by 6%. I'm still holding out hope that the prospect of even more pain like this, and ahead of the U.S. midterms, no less, is enough to bring Trump back to the table. Whether or not that happens, this entire saga has felt like an own goal. Explanations for these duties have been inconsistent and often in conflict with other actions. Case in point, in the same breath that Trump punishes Canada for protectionism in its agricultural sector, he announces a plan to exempt 300,000 metric tons of imported ground beef from tariffs to artificially lower beef prices,

to the detriment of U.S. agriculture. All the while, his tariff regime has come at an enormous cost to the country, with refunds from the ill-fated Liberation Day duties now outpacing all the revenue collected from tariffs since May. I don't believe President Trump is interested in assessing these facts or considering a new course. In reality, tariff fights will probably play out through the remainder of his term. With Canada, the president's frequent policy pivots mean an all-out trade war isn't a done deal. but this moment is surely a new low in the relationship, and it could soon go lower.

In the long run, everyday Americans and Canadians will bear the brunt of those consequences. All right, that is my take. Now I'm going to pass it over to our managing editor, Ari Weitzman, who had a concurrence to offer on this topic. All right, over to you. This is Tangu's managing editor, Ari Weitzman, with a staff concurrence.

I agree with Will that the U.S.-Canada relationship can deteriorate further, and I share his hopes that these tariffs won't last long. However, I'd contrast what he calls his naive hope with my cynical one. Last year, the standard playbook response to a Trump tariff threat with some small concession to make it go away. Now, Canada's running a different playbook, which puts the ball in Trump's court. If the negotiation with Iran provides any template, I'd expect Trump to look for a quick off-ramp he can use to claim victory while shifting attention back to something he'd rather talk about.

Like immigration or university funding, he certainly has no shortage of targets. But that's it for my concurrence today, so I'm going to pass it back over to Whale for the rest of the pod. We'll be right back after this quick break. Thanks, Ari. All right, now to today's audience question, which comes from an anonymous reader in Richland, Washington. the reader asks, what has happened to the money that the government has refunded companies since the tariffs were ruled unconstitutional? Has the government paid refunds? Here's our response. Yes, the government has started paying refunds. In total, the Trump administration said it collected $168 billion from 330,000 importers through the IEPA tariffs before they were struck down by the court in February.

As of July 31st, $100 billion of that money has been returned. Corporate giants have begun reporting that the government is sending money back and that the money is hitting their bank accounts. Walmart says it got $2.9 billion and Apple got $2.2 billion. Home Depot, Nike, Amazon, and Target also received hundreds of millions of dollars in tariff refunds. And some small businesses have reported refunds as well. However, consumers who paid higher prices, due to the tariffs shouldn't expect direct refunds of their own. Some companies have made vague promises about using the refunds to keep prices down or getting the money back to consumers, but the hair-polling reality is that many consumers paid higher prices to corporations to cover the tariffs, and now the government is paying that money back to the corporations who raised those prices. Consumers likely won't see a dime unless corporations find a way to calculate what they owe

and then deliver it. However, there is some hope for people who paid tariffs to shipping companies like UPS and FedEx. Those companies often explicitly noted how much the tariffs forced them to raise prices. So that calculation is already done, and not returning the money could open them up to lawsuits. FedEx announced they will refund $800 million to customers,

and both companies have opened to online portals for refund requests. One woman who spoke to NPR said, UPS representative told her that it received a refund from the Trump administration and was working on a refund to pass onto her. For now, this is how things stand. The government is issuing refunds to companies. Very few have said if or how they plan to pass that money onto consumers. So it's safe to assume that most of it will stay with those corporations and small businesses. Okay, now I'm going to pass it back to Audrey to take us home on this edition. Thanks as always for listening. And Audrey, over to you. Finally, we have our Have a Nice Day story to wrap things up. The NASA Voyager 1 and 2 missions

launched in 1977 to explore Jupiter and Saturn were expected to last five years. At 49 years in counting, both spacecraft have greatly exceeded their original missions and are the farthest man-made objects from Earth. However, NASA has gradually had to turn off instruments on each Voyager to conserve power as the plutonium that powers them slowly decays. Recently, NASA was preparing to power down another instrument on Voyager 2, but engineers came up with a new approach. By reconfiguring where the power on board goes, they were able to reduce demand,

buying the spacecraft even more time. The engineers are now planning to perform the same reconfiguration on Voyager 1. Scientific American has the story, and you can find the link in the show notes. All right, everyone, that's it for today's podcast. If you would like to support our work, head over to readtangle.com,

where you can buy a newsletter subscription, a podcast subscription, or a bundle membership that gets you a discount on both. We will be right back here tomorrow, but in the meantime, this has been editor, Audrey Moorhead. On behalf of Isaac and everyone else, have a great day and peace. Our executive editor and founder is me, Isaac Saul, and our executive producer is John Law. Today's episode was edited and engineered by Dewey Thomas. Our editorial staff is led by managing editor Ari Weitzman with senior editor Will Kovac and associate editor, Audrey Moorhead, Lindsay Canuth, and Bailey Saul.

music for the podcast was produced by Diet 75. To learn more about Tangle and to sign up for a membership, please visit our website at reetangle.com.