New US tariffs of 50% on C$20 billion (roughly $14.6bn) of Canadian goods took effect on Saturday, days after officials had called a Canada-US trade deal "very close," according to the BBC. Canadian Prime Minister Mark Carney said Ottawa will match the levies "dollar for dollar to protect our workers and businesses," per France 24.

The tariffs reopen a trade war both governments had appeared close to shelving; talks failed in their final hours, according to CTV News and the Seattle Times.

The reversal undercuts the idea that a near-final trade agreement with Washington can be treated as settled. Canada is a top US trading partner and close security ally; if a deal this far along can unravel overnight, other governments negotiating with Washington may hold off on unwinding retaliatory measures until tariffs are durably lifted, not just paused.

Carney's dollar-for-dollar pledge signals Ottawa intends to escalate rather than wait out the tariffs, risking a tit-for-tat cycle just as the two economies were beginning to normalize trade flows.

What to watch: which Canadian goods and sectors Ottawa targets in its retaliation list, whether Washington and Ottawa resume talks, and whether other US trading partners cite this collapse as reason to delay lifting their own countermeasures.