Canadian Prime Minister Mark Carney said Saturday he would slap retaliatory tariffs on the United States after walking away from a “bad deal” on trade, deepening the rift between the longtime allies.

Negotiations between the neighboring countries broke down on Friday in Washington, allowing new 50-per cent US tariffs impacting some $20 billion worth of goods, or 5.5pc of Canadian exports to the United States, to come into force. Impacted products range from hockey sticks to cement.

US President Donald Trump had said Washington “should be able to have a deal with Canada”, citing his “good relationship” with Carney.

But on Saturday, the Canadian prime minister said Trump had set conditions that were ultimately unacceptable.

“We believed earlier this week that we were moving towards a mutually beneficial agreement,” Carney said in the Canadian capital, Ottawa.

“In recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits for Canada, and called into question the reliability of any deal. In short, they asked too much and they offered too little,” he said.

“We cannot accept what they’ve offered, and we will not give what they’ve asked,” Carney said, accusing Trump of launching a trade “war”.

“You’re at war when you get attacked. We got attacked,” Carney said.

New Canadian tariffs will notably target the US steel and dairy industries and take effect on September 8. Carney said further details would come next week.

On Friday, US Trade Representative Jamieson Greer said Washington had offered “significant tariff reductions on steel, aluminum, autos and lumber” in exchange for concessions from Canada.

A senior US official, who spoke on condition of anonymity, characterised the talks as candid and not acrimonious.

Then in a Saturday interview with Fox News, Greer said the United States was “moving forward with measures that respond to Canadian retaliation.” Greer also noted it was not clear if trade talks could get back on track soon, saying, “we don’t have new talks planned with the Canadians.”

‘Significant pressure’

Canada has been seeking relief from Trump’s tariffs on autos, steel and aluminum, which have battered the country’s economy, forced job losses and strained what was once an iron-clad trade relationship.

Canadian negotiators had been camped out in Washington this week to firm up a deal that aimed to address various flashpoints.

The White House had alleged “discriminatory treatment” by Canada against US alcohol, automobile and dairy products in introducing the duties. They were originally set to take effect on Wednesday, before Trump issued a last-minute delay of three days, citing major progress in talks.

Ryan Majerus, a former US commerce official who is now a trade lawyer with King and Spalding, told AFP that “both sides will face significant pressure in the coming days to find an off-ramp.”

Senator Amy Klobuchar of Minnesota, a US state which borders Canada, warned that the escalating trade war will raise costs for her state’s small businesses, farmers and families.

“Canada is Minnesota’s number 1 trading partner,” the Democratic lawmaker posted on X. “Minnesotans are paying for Trump’s chaos.”

Beyond the latest tariffs, the United States and Canada still have to agree on revisions to the North American free trade agreement, USMCA, which Trump declined to renew in its current form.

Bilateral ties have also been hurt by Trump’s repeated threats to make Canada the 51st US state.

Trump was irked by Carney’s widely-touted January speech at the World Economic Forum in Davos, Switzerland in which the prime minister declared that the global order was experiencing a “rupture.”

Carney has repeatedly said relations with the United States have been forever altered, and that Canada must reduce its reliance on its southern neighbor, which currently accounts for roughly 70pc of Canadian exports.

“We’ve been under no illusions. We recognized from the start that America has changed,” Carney told reporters on Saturday. “We recognize that sometimes, its signature was written in pencil.”