The move marks a fresh escalation in trade tensions between US President Donald Trump and Canadian Prime Minister Mark Carney, despite several days of intensive negotiations aimed at reaching a deal before the tariff deadline.

US and Canadian trade officials held negotiations in Washington for several days, with hopes of resolving major disagreements over tariffs and access to each other's markets.

The talks had initially appeared promising. Canadian Trade Minister Dominic LeBlanc said the two countries were “very close” to reaching an agreement.

A proposed deal was expected to reduce tariffs on Canadian-built vehicles from 25% to 15% and cut tariffs on Canadian steel and aluminum to 25%.

However, the negotiations broke down after disagreements over changes proposed by the US side late in the discussions.

Canada said it could not accept the changes, while Washington accused Ottawa of seeking concessions beyond what the United States was prepared to offer.

Following the collapse of the talks, Carney announced that Canada would suspend negotiations with Washington and respond to the new US tariffs with measures on a dollar-for-dollar basis.

The newly imposed US tariffs affect about 5% of Canada's exports to the United States.

Although most Canadian exports are not covered by the new measures, the tariffs could increase costs for businesses and put pressure on affected industries and jobs.

The dispute adds pressure to the broader economic relationship between the two countries and could complicate future negotiations over the United States-Mexico-Canada trade agreement.

The two governments had also been discussing issues including Canadian restrictions on US alcohol sales and rules governing automotive trade.

With the negotiations suspended and no new talks scheduled, businesses on both sides of the border now face increased uncertainty as the latest tariffs take effect.