The Canadian prime minister, Mark Carney, announced retaliation against the United States after tariffs of 50% on certain Canadian products took effect.

Why it matters: Canada promises to respond «dollar for dollar,» escalating trade tension after both governments failed to reach an agreement.

The US tariffs took effect shortly after midnight on Saturday, August 22, following a three-day pause ordered by Trump.

The measure had been announced through an executive order on July 20 and was originally set to begin on August 19.

Trump’s Tariffs on Canada Spark Retaliation

Trump delayed implementation while Washington and Ottawa attempted to close a deal. However, the conversations ended without success on August 21.

Carney responded by suspending negotiations and ordering Canadian representatives to return to Ottawa.

In numbers: Canada plans to impose retaliatory tariffs on US goods valued at approximately $28 billion.

«They have worked hard and in good faith to defend the interests of Canadians throughout these negotiations, until the last minute,» Carney stated.

The prime minister described the last-minute changes proposed by the US as «unfair, anti-economic» and questioned the reliability of any agreement under those conditions.

Carney Promises to Respond «Dollar for Dollar»

Carney confirmed on August 22 that Canada will match US tariffs «dollar for dollar.» The retaliation will begin next month.

The specific details of the affected US products will be revealed in the coming days.

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What’s next: Ottawa will need to specify which US products will face the new tariffs and how the trade response will be applied.

Washington, however, blamed Canada for the failure of the negotiations.

The office of US Trade Representative Jamieson Greer stated that Canada refused to finalize the agreement after receiving a favorable offer.

According to this version, new Canadian demands and the alleged failure to comply with commitments altered the balance achieved during the last days of conversations.

The US also questioned Canada’s maintenance of measures against certain US goods and services.

The Tariffs Reach Part of Canadian Exports

The new tariffs affect just over 5% of Canada’s exports to the US.

Among the affected products are wine, dairy products, hockey sticks, and cement.

The limit: Energy, potash, fish, and critical minerals are among the products exempt from these tariffs.

Much of Canada’s merchandise had previously been protected by the preferential treatment established under the trade agreement between the US, Mexico, and Canada.

Trump justified the new tariffs, arguing that he seeks to respond to what he considers discriminatory treatment by Canada against US trade.

The breakdown of the conversations now leaves both governments preparing new trade measures, while Ottawa moves forward with the promised retaliation for next month.