President Donald Trump imposed 50% tariffs on $20 billion worth of Canadian imports on Saturday after bilateral trade talks collapsed on Friday, triggering dollar-for-dollar retaliation from Ottawa and threatening the future of North America’s flagship trade pact.

Canadian Prime Minister, Mark Carney announced retaliatory tariffs targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, set to take effect September 8.

“You’re at war when you’re attacked, and we got attacked,” Carney told reporters on Saturday.

The 50% U.S. levies cover roughly $20 billion in Canadian exports—about 5.5% of Canada’s shipments to America. According to Oxford Economics, the effective U.S. tariff rate on Canadian goods will rise to 6.9% from 5.1%. While the immediate impact appears modest, the potential for escalation is substantial. Total trade between the two nations hit $715 billion last year, with Canada buying more U.S. goods and services than any other country.

Trump has since threatened to raise tariffs on Canadian cars, trucks and automotive parts from 25% to 50%, effective January 1, 2027. “Canada has been ripping off the United States of America for years,” Trump posted on Truth Social.

In an interview with Glenn Beck on Wednesday, Trump said, “I had a deal, that was a pretty good deal. They don’t have anything that we have to have. We can get by. There are a couple of things that would make it a little inconvenient, but we can get them elsewhere. And it’s time to teach Canada you can’t do this anymore.”

Carney said he suspended negotiations because Washington introduced last-minute changes that were “unfair, uneconomic, and called into question the reliability of any deal.” “They asked too much and offered too little,” he said.

The breakdown also threatens the US-Mexico-Canada Agreement. Trump declined to renew the pact on July 1, subjecting it to annual reviews instead. The agreement remains in force until 2036 unless a country exits, but uncertainty now hangs over the critical supply chain that moves $872 billion in goods between the U.S. and Mexico alone.

White House adviser, Peter Navarro warned on Wednesday that Canada’s next offer will be worse. “It just is not going to end well for Canada. Whatever you get is going to be less than that.”

Ontario Premier, Doug Ford said Carney has his “full support” for a strong response “tariff for tariff, dollar for dollar.” British Columbia Premier David Eby noted that U.S. demands that Canada cut trade with other countries would turn it into “the economic equivalent of the 51st state”—“never acceptable” to Canadians.

Canada has also rolled out a 7.5 billion Canadian dollar support package for affected businesses and workers. Carney has said Canada remains willing to return to the table—but only if the U.S. comes with “the right attitude.”