(Updates with details in the 8th, 9th and last three paragraphs, including comments from Angus Reid and CFIB.)
Canada and the US are heading for a fresh trade confrontation after last-minute negotiations collapsed late Friday, prompting Canada to promise "dollar-for-dollar" reciprocal tariffs on American goods.
Canadian Prime Minister Mark Carney suspended talks, saying last-minute changes to US proposals were "unfair" and "uneconomic." The US blamed Canada for the end of the talks, adding that Carney rejected terms agreed earlier in the week.
"You're at war when you're attacked, and we got attacked," the Canadian prime minister told reporters over the weekend. Canada plans to introduce counter-tariffs on Sept. 8 on US goods such as steel, appliances and electronics.
As of Saturday, Canada is subject to US 50% tariffs on specific goods worth C$28 billion, including dairy products, cement and hockey equipment, in addition to existing ones on lumber and aluminum.
The breakdown followed weeks of negotiations over threatened US tariffs. Earlier last week, there was optimism when President Donald Trump paused the measures, saying the two countries were close to reaching a "very good" deal. Carney had also spoken of progress in the talks.
Negotiators had reportedly also considered reducing US tariffs on Canadian steel and aluminum, as well as Canadian automobiles.
"Canada wants the benefits of being a State, without being one!!!," wrote President Trump in a Sunday Truth Social post.
Carney's hardening of positioning appears to have the backing of the vast majority of Canadians.
Three in four Canadians, or 76%, backed Carney's decision to abandon trade negotiations with the US, underscoring that Canadians' longstanding calls for Ottawa to take a "hard line" with Washington reflected a genuine national resolve, found Angus Reid Institute in a survey published on Saturday.
The collapse of these talks has also raised questions over the future of the North American trade agreement between the US, Canada and Mexico, known as the USMCA in the US and as CUSMA in Canada.
Signed by Trump during his first term, the pact governs around $2 trillion in annual trade in goods and services between the three countries. Trump declined to renew the agreement this summer after Canada and Mexico formally requested a 16-year extension.
The two countries have forged one of the world's most closely integrated trading relationships, with the vast majority of Canadian exports destined for the US. The economic consequences of the worsening of the trade spat could hit Canadian jobs and firms particularly hard.
"Serious worries about job loss temper the defiance," wrote Angus Reid in its note, adding that one in eight, or 13%, Canadian workers are very concerned about losing their jobs, while another 25% feel some level of anxiety. Experts warn that a no-deal scenario could cost Canada 0.4% of GDP and up to 90,000 jobs.
Around 40% of small Canadian exporters will be directly affected by the new tariffs of Saturday, with nearly a third expecting their revenues to fall by 50% or more, said Dan Kelly, President of the Canadian Federation of Independent Business, in a Saturday note.