CANADA will impose dollar-for-dollar tariffs on selected US goods from September 8 after trade talks with Washington collapsed, Prime Minister Mark Carney said, escalating an increasingly bitter trade dispute between the two longtime allies.
The retaliatory measures will target US steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics, among other goods, in response to new 50% tariffs imposed by US President Donald Trump on Canadian products.
Canada's tariffs will add further pressure to businesses and consumers on both sides of the border, while raising fresh concerns over jobs, prices and the future of the US-Mexico-Canada free trade agreement.
"Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses," AP cited Carney telling a press conference.
"You're at war when you get attacked. We got attacked," he said when asked whether Canada was engaged in a trade war.
The two countries failed to reach a trade agreement late on Friday following three days of intensive negotiations, with both sides blaming the other for the breakdown.
Carney said the latest US demands were unacceptable and had undermined the prospects of a mutually beneficial agreement.
"We cannot accept what they have offered, and we will not give what they have asked," he said.
The latest US tariffs cover about $20 billion of Canadian exports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.
Unlike earlier measures, the new duties do not exempt Canadian products covered by the three-nation trade agreement, which has shielded most Canadian exports to the US over the past 18 months.
Carney said the new US tariffs covered about 5% of Canada's exports to the US but could have a disproportionate impact on vulnerable industries, including softwood lumber and wine.
Canadian businesses have warned that prolonged tariffs could result in job losses, reduced investment and business closures.
"We will be mobilizing our network of businesses in all regions and all sectors to brace for impact and make the best of a bad situation," Canadian Chamber of Commerce CEO Candace Laing said.
Carney said Ottawa would announce support measures next week for industries affected by the new US duties, with assistance potentially continuing for several years.
The breakdown also threatens to complicate the future of the US-Mexico-Canada trade pact and comes as Canada seeks to reduce its economic dependence on the United States.
Canada sends nearly 70% of its exports to the US, making the country particularly vulnerable to prolonged trade tensions.
US Trade Representative Jamieson Greer described the collapse of negotiations as "a missed opportunity for Canada to partner with the United States".
"We're moving forward with measures that respond to Canadian retaliation," Greer told Fox News.
He said Washington had offered Canada favourable terms but claimed Ottawa had rejected them.
Carney said the US administration's last-minute demands included conditions that would have restricted Canada's ability to establish new trade agreements with other countries.
He said the demands were "uneconomic, unfair, and undermined the net benefits to Canada, calling into question the reliability of any deal".
The treatment of larger vehicles was also a major sticking point in the negotiations.
Canada sought to extend favourable tariff terms for light-duty vehicles to medium- and heavy-duty trucks, but the US resisted the proposal.
Carney said the US position would have excluded Canadian-made models, including Ford's F-350, F-450 and F-550 trucks and General Motors' Silverado, potentially making Canadian production less competitive.
He also said US proposals had raised issues affecting Canadian culture, language and sovereignty, without providing further details.
Ontario Premier Doug Ford, one of Canada's most outspoken critics of US tariffs, backed Carney's decision to retaliate.
"I'm glad he didn't sign that deal because it was a bad deal. It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector, and manufacturing sector," Ford told reporters.
Opposition Conservative Party leader Pierre Poilievre also backed a tougher stance against Washington.
"Canadians must stand united to defend our country against these unfair attacks on our jobs and businesses," he said.
Carney, who was elected last year on a pledge to stand firm in negotiations with Trump, remains broadly popular as most Canadians oppose making concessions to Washington, according to opinion polls.
The latest escalation marks another setback for relations between two countries whose economies and supply chains have been deeply integrated for decades. - August 23, 2026
