Canada has suspended trade negotiations with the United States after talks broke down, with Prime Minister Mark Carney warning that Ottawa will respond to new US tariffs with dollar-for-dollar measures.
The decision came shortly before a deadline for reaching a deal, following weeks of negotiations aimed at easing tensions between the two major trading partners. 
Mr Carney said significant progress had been made, but it was not enough to meet Canada’s objectives. He criticised last-minute changes to the US proposals, describing them as unfair and economically damaging.
Last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal,” he said.
The breakdown means a new wave of US tariffs will now affect a range of Canadian products. The 50% levies apply to about 5% of Canadian exports, including wine, dairy products, cement, clothing and hockey equipment.
The new tariffs come on top of existing US duties on Canadian steel, aluminium, cars and lumber.
Canada sends about 70% of its exports to the US, making the country particularly vulnerable to a prolonged trade dispute.
Mr Carney said Canada would impose reciprocal tariffs on American goods, matching the value of the US measures “dollar for dollar”.
The announcement marks a sharp change in tone after officials from both countries had expressed optimism earlier in the week that a trade agreement was close.
US Trade Representative Jamieson Greer accused Canada of backing away from commitments reached during negotiations.
Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week,” he said.
The negotiations had reportedly included discussions over reducing US tariffs on Canadian steel and aluminium from 50% to 25%, while tariffs on Canadian vehicles could have fallen from 25% to 15%.
In return, the US had sought concessions from Canada, including greater access for American dairy products and the removal of restrictions on US alcohol sales in Canadian provinces.
Canadian businesses have warned that the tariffs could cause significant economic damage.
The Canadian Chamber of Commerce described the new measures as a “body blow to North American competitiveness”, warning that smaller exporters could struggle to maintain orders, payrolls and jobs.
Economists have estimated that Canada could lose about 90,000 jobs if the tariffs remain in place, while financial analysts have projected that the measures could reduce Canada’s gross domestic product by between 0.3% and 0.6%.
Ontario Premier Doug Ford backed the federal government’s response, calling for “tariff for tariff, dollar for dollar”.
The latest dispute adds to growing tensions between the two countries since US President Donald Trump returned to office and introduced a broad programme of tariffs.
