Prime Minister Mark Carney has said a fresh wave of US tariffs on Canada is a "miscalculation" designed to "hurt and divide us", after trade talks collapsed late on Friday.
"They asked too much and they offered too little," Carney told Canadians on Saturday morning, adding the country was now in a trade "war" after being hit with punishing new US duties.
The prime minister confirmed he would match US tariffs "dollar-for-dollar" from 8 September, including levies on steel, dairy, appliances and electronics.
The collapse of the trade talks upends a deeply integrated trading relationship between two allies, with no clear path to resolution.
US President Donald Trump has yet to comment.
Both countries were optimistic of a deal earlier in the week, but talks fell apart after both sides accused the other of making last-minute changes.
Now that talks have broken down, Canada has been hit with new 50% US tariffs on a range of Canadian goods, in addition to existing US tariffs on Canadian steel, aluminium, automobiles and lumber.
The new tariffs are limited in scope, covering about $20bn (£15bn; C$28bn) of Canadian imports, or about 5% in total, including wine, dairy, cement, clothing and hockey equipment.
The prime minister said Canada was retaliating "reluctantly" to protect its interests. Details of the counter-measures will be released in the coming days, he said.
Leaders of other federal parties in Canada, including the Conservative opposition, voiced support for the prime minister, as have the leaders of some Canadian provinces.
Tariffs - a tax placed on imports from other countries - have been a key component of Trump's trade policy, with the US president arguing they will boost American manufacturing and create jobs at home.
Critics, however, say tariffs have raised prices for American consumers and have disrupted and damaged the global economy.
Carney's speech on Saturday was his first address to Canadians after he announced late on Friday night that a deal would not be reached, accusing the Americans of making "last-minute changes" that were "unfair" and "uneconomic".
US negotiators, meanwhile, accused Canada of making "new demands and walk backs" on terms which had been previously agreed.
On Saturday, US trade representative Jamieson Greer told Fox News there were no plans to resume talks.
He added that the US had been prepared to cut some of its tariffs on Canada as part of the ill-fated deal.
Carney, however, said the US presented "unacceptable" terms that were too restrictive, including curbing Canada's ability to strike new trade deals with other countries.
He also rejected the assertion that Canada had made last-minute requests: "We clarified what was on offer and were continually disappointed by the answers."
Doug Ford, the leader of Canada's most populous province Ontario, backed Carney and said Trump "can't be trusted".
British Columbia Premier David Eby said the US demand for restrictions on Canada's ability to have other trade deals "would reduce us to the economic equivalent of the 51st state".
"It was never acceptable to Canadians," Eby said.
The Conservative opposition leader Pierre Poilievre also appeared to support Carney, calling the latest US levies "unjustified".
Quebec's premier, Christine Fréchette, warned jobs would likely be lost as a result of the new US tariffs.
"Behind these numbers are real people," she said, vowing to introduce measures to support impacted sectors.
Alberta Premier Danielle Smith, whose oil-rich province has worked to make inroads with the Trump administration, urged both sides to resume talks.
The collapse comes after more than a year of on-again, off-again trade talks, which intensified in recent weeks after a US-imposed deadline to strike a deal or face further tariffs.
The two countries were also engaged in a mandatory review of an existing North American free trade agreement, known as USMCA, with Mexico.
The pact was signed by Trump during his first term to replace the 1994 North American Free Trade Agreement. It underpins $1.6tn (£1.2tn) in annual trilateral trade across Canada, the US and Mexico.
Earlier this summer, Canada and Mexico had formally requested for USMCA to be renewed for another 16 years. The US, however, declined to renew it in its current form.
Asked how Friday's trade talk collapse would impact the North American free trade pact, Carney said it was "certainly not good news".
Source: BBC
-Agencies
