The trade conflict flares again while oil stays expensive

Aug 22, 2026Moment 1 of 7

The trade conflict flares again while oil stays expensive

Moment dated Aug 22, 2026; earliest linked report published Sep 4, 2026.

WHAT HAPPENED

Trade talks between Canada and the United States broke down on August 21, 2026. The next day the US imposed 50 per cent tariffs on about $28 billion of Canadian goods. Canada answered with counter-tariffs set to start September 8. Drivers were already paying more for gasoline. The Bank of Canada says the continuing conflict in the Middle East is keeping energy prices high. Inflation has sat near 3 per cent since April 2026. The Bank later noted that most of Canada's counter-tariffs fall on intermediate inputs, materials such as steel that businesses buy to make other things. It expected their effect on inflation to be muted and spread out over time.

Why this matters

A second shock landed on top of the first. Expensive oil was already the main thing holding inflation near 3 per cent when tariffs arrived, and tariffs can push Canadian prices up too. An interest rate cannot end the Middle East conflict or the trade conflict.

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Factual assertion Supported by evidence

The United States has imposed 50 per cent tariffs on about $28 billion of Canadian goods. It did so on August 22, 2026, after trade talks broke down. Canada answered with counter-tariffs of its own, set to start September 8.

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