The United States imposed 50% tariffs on about $20 billion worth of Canadian goods early Saturday after negotiations failed to produce a trade agreement, prompting Canada to suspend talks and pledge matching retaliation.
The duties affect products accounting for just over 5% of Canadian exports to the United States, including hockey equipment, and deepen tensions between President Donald Trump and Prime Minister Mark Carney.
The breakdown followed three days of negotiations in Washington and came after officials had appeared close to a compromise involving steel, aluminum and autos.
Carney directed Canadian negotiators to return to Ottawa and said Canada would respond to the tariffs dollar for dollar, while his government plans additional support for affected workers and businesses.
He blamed last-minute changes to proposed U.S. terms, describing them as unfair and uneconomic and questioning the reliability of an agreement.
U.S. Trade Representative Jamieson Greer offered a sharply different account, saying Canada declined to finalize terms agreed earlier in the week and sought additional concessions.
A senior Trump administration official said Canadian demands focused particularly on steel, aluminum, autos and softwood lumber.
No additional negotiations are currently scheduled.
The tariffs had initially been due to take effect Wednesday, but Trump extended the deadline by three days to allow negotiations to continue.
The latest duties add to existing U.S. tariffs affecting Canadian steel, lumber and autos, while raising concerns about broader negotiations over the U.S.-Mexico-Canada Agreement.
Products qualifying for preferential treatment under the USMCA are not subject to the new tariffs.
Canada sends nearly 72% of its goods exports to the United States, while the two countries traded $880 billion worth of goods and services last year.
Ontario Premier Doug Ford backed Carney's response and called for tariff-for-tariff retaliation.
Canadian Chamber of Commerce President and CEO Candace Laing warned that the measures could weaken North American competitiveness, raise costs for Americans and threaten Canadian businesses and investment.
With both governments publicly committing to opposing positions and Canada preparing retaliation, the failed negotiations have intensified an already widening trade dispute between the longtime allies.