Canada is set to hit back at the United States with dollar-for-dollar tariffs from September 8, Prime Minister Mark Carney announced Saturday, escalating the trade war after Washington imposed 50 per cent tariffs on Canadian goods and last-ditch talks between the two countries collapsed. Carney said the retaliation would target steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.

Carney, speaking in Ottawa, also disclosed that Canada had been willing to drop remaining retaliatory tariffs on steel, aluminum and autos if the United States substantially lowered its own, and to encourage provinces to restore US alcohol sales. But he said Washington‘s final demands went too far.

“They asked too much and offered too little,” he remarked.

Details of the specific products will be released in the coming days.

The United States imposed 50 per cent tariffs on USD 20 billion worth of Canadian products early Saturday, and Canada immediately said it would retaliate after last-ditch negotiations failed to resolve the latest strain in relations between the historic allies. President Donald Trump’s import taxes will hit about 5 per cent of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors.

“Canada will match those tariffs dollar for dollar to protect our workers and businesses,” Prime Minister Mark Carney said in a statement.

The retaliation escalates the trade conflict and calls into question the future of a North American trade agreement covering the United States, Canada and Mexico that is crucial to industry in all three countries. Canada had sought concessions on tariffs on steel, aluminum, autos and lumber.

“Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week. Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days,” US Trade Representative Jamieson Greer said in a statement read to reporters shortly before midnight.

Carney blamed the Republican administration for the breakdown, saying “last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal.” He said he had suspended negotiations and directed Canada’s negotiating team to return to Ottawa.

(With agency inputs)