The U.S. early Saturday imposed 50% tariffs on Canadian products that account for some $20 billion in annual trade, after negotiations between the two countries broke down at the last minute.

Each side has blamed the other for the negotiations' collapse.

Earlier in the week, President Donald Trump said the U.S. and Canada were close to closing a "good deal" for one of America's main trade partners.

The Trump administration had extended an original Wednesday deadline for the talks on the new tariffs that Trump proposed. In February, the U.S. Supreme Court invalidated a round of tariffs he'd declared in 2025 via the International Emergency Economic Powers Act.

Friday's tariffs cover a slice of imports from Canada that include plywood, liquor, and hockey gear. The U.S. already levies 50% tariffs on Canadian steel and aluminum, and has a 10% tariff on lumber.

The U.S. and Canada accused one another changing demands at the last minute. Canada's prime minister Mark Carney, a former central banker, on Saturday vowed to impose dollar-for-dollar retaliatory tariffs. Some Canadian provinces imposed symbolic restrictions on U.S. liquor.

The breakdown between the two major trading nations comes after the Trump administration refused to renew the broader United States-Mexico-Canada Agreement, or USMCA, that Trump negotiated in his first term. The administration's new tariff escalation may also threaten the efforts of the Federal Reserve to keep price inflation and interest rates in check.

The U.S. and Canada collaborate in manufacturing automobiles, so the tariffs will likely weigh on that industry. Neither country has said they plan to resume talks.