The latest set of tariffs imposed by the Trump administration on Canadian goods worth billions of dollars went into effect early Saturday after both countries failed to reach a trade agreement. Prime Minister Mark Carney announced that Canada would retaliate with equivalent tariffs following the U.S.’s decision to implement hefty 50% tariffs on various products. Although negotiations were close to a resolution, Carney stated that Ottawa could not accept the final terms proposed by the U.S.

In response, the Canadian prime minister suspended trade talks with the U.S. and instructed Canadian negotiators to return to Ottawa. U.S. President Donald Trump refrained from immediate comment on the matter. U.S. Trade Representative Jamieson Greer expressed disappointment as talks collapsed due to Canada’s rejection of the proposed deal.

The escalating trade dispute between Canada and the U.S., once strong trade partners, has led to increased tensions. Canadian Trade Minister Dominic LeBlanc met with his U.S. counterpart in Washington, D.C., in a last-minute attempt to secure a deal before the deadline.

While the specific terms of the potential agreement were not disclosed, sources revealed that it aimed to reduce sectoral tariffs affecting Canadian industries such as aluminum, steel, and automobiles. Carney also urged Canadian premiers to consider lifting provincial bans on American alcohol.

The newly imposed American tariffs and Canada’s pledge to reciprocate mark a significant escalation in the trade conflict. The Canadian Chamber of Commerce warned that the high tariffs would negatively impact North American competitiveness and business sustainability.

Under the Trump administration’s policy, a 50% tariff rate will be applied to a wide range of products valued at over $28 billion, spanning items from plywood and cement to wine and sports equipment. The tariffs are a response to Canada’s previous retaliatory measures against U.S. trade policies, particularly in the dairy, alcohol, and automotive sectors.

The tariffs are enforced under Section 338 of the U.S. Tariff Act, allowing the president to levy tariffs up to 50% on countries deemed harmful to the American economy. The affected goods no longer benefit from exemptions under the Canada-United States-Mexico Agreement, CUSMA.

The electronics and plastics sectors in Canada are expected to bear the brunt of the tariffs, with electronic equipment and various plastic products facing significant duties. British Columbia and Quebec are likely to be disproportionately impacted by the tariffs due to their high export reliance on the affected goods.