Donald Trump's 50% US tariffs on Canada to be matched 'dollar for dollar' after trade talks collapse

The United States has imposed a 50% tariff on $20bn (£14.6bn) worth of goods from Canada, which has vowed to retaliate against its historic ally.

Donald Trump's tax on imports will hit about 5% of the goods Canada ships to the US every year, which range from hockey sticks to tongue depressors.

Canadian prime minister Mark Carney said his country would retaliate against the US, with measures being brought in on 8 September.

It comes after the two countries failed to reach a trade deal late on Friday as negotiations broke down, worsening an ​already delicate relationship between the two long-term partners.

"Canada will match Washington's new tariffs dollar for dollar to protect Canadian workers, farmers, families, and businesses," Mr Carney told a news conference in Ottawa.

He said the retaliatory ​tariffs will hit sectors such as steel, dairy, ​appliances, agricultural equipment, pulp and paper, and electronics.

Mr Carney disclosed Canada had been willing to drop remaining retaliatory tariffs on steel, aluminum and automobiles if the US substantially lowered its own.

But he claimed Washington's final demands went too far, saying: "They asked too much and offered too little."

He said that "last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal".

According to the Canadian PM, the last-minute terms would have cut tariff relief for Canadian-made vehicles, restricted Canada's ability to strike trade deals with other countries and weakened protections for language, culture and sovereignty. He said such demands were "unacceptable".

Mr Carney stated: "We have recognised from the beginning that America has changed, and that we will not return to our old relationship."

He said he had suspended negotiations, and directed Canada's negotiating team to return to Ottawa.

Canada had sought concessions on tariffs on steel, aluminium, automobiles and timber that the US was unwilling to provide, a senior Trump administration official told reporters.

"Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week," trade representative Jamieson Greer said.

"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."

Mr Greer said the US's offer was "forward-looking", and included a "historic economic and national security partnership".

He had previously said Canada's goal throughout the negotiations had been to secure the best possible agreement "never a deal at any price or on any deadline".

No further talks have been planned.

Mr Carney said his government would announce additional support for Canadian workers and businesses in the coming days.

The breakdown in negotiations marked a strong contrast to two days earlier, when officials from the two countries indicated they were headed toward a compromise.

The countries sold each other $880bn (£645m) worth of goods and services last year, though the political impact is likely to be just as significant as the economic fallout.

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Historically, the relationship between the neighbouring countries has been co-operative, with Canada sending troops to Afghanistan after 9/11 and nearly 330,000 people and $2bn (£1.47bn) worth of goods crossing the border each day.

The escalation in trade tensions also calls into question the future of a trade pact between the US, Canada and Mexico which was agreed during Mr Trump's first term.

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