Prime Minister Mark Carney said Canada will apply countertariffs on $20 billion of U.S. products on Sept. 8, escalating the feud rocking one of the world’s biggest trading relationships.

“We take this step reluctantly,” Carney said Saturday, “because we recognize that it will raise costs and reduce choice for Canadians.” The move will also hit innocent U.S. companies and states and make it harder for the two countries to work together, the prime minister acknowledged.

But he said he was left with little choice after trade talks with President Donald Trump’s administration broke down on Friday night and the U.S. put import taxes of 50% on items such as plywood, liquor, electrical equipment and hockey gear from Canada.

“You’re at war when you get attacked,” Carney told reporters in Ottawa. “We got attacked.”

The retaliatory taxes will apply to U.S. steel, dairy, appliances, agricultural equipment, electronics, pulp and paper, with more detail to be published in the coming days, the prime minister said.

The retaliatory duties are meant to match the latest U.S. tariffs in dollar terms. Trump used a Depression-era authority known as Section 338 for the first time to impose the tariffs on Canadian goods totaling about $20 billion in annual U.S. imports.

By punching back, Carney is taking an economic and political risk. U.S. officials indicated Friday that if Canada retaliated, they would have options to escalate — raising the possibility of a spiraling trade war between two countries that exchanged almost $900 billion of goods and services last year.

Carney said talks fell apart for a number of reasons. One involved Trump’s auto tariffs, which are set at 25% on the non-U.S. content in a Canadian-made vehicle. The negotiating teams discussed lowering that to 15%, but the U.S. didn’t want to extend that tariff relief to medium to heavy-duty trucks. such as the kind currently going into production at Ford Motor Co.’s factory in suburban Toronto.

The U.S. also sought to put limits on Canada’s trade deals with other countries and made demands on cultural and French-language issues that were unacceptable, Carney said.

He added the tension isn’t good news for talks around the U.S.-Mexico-Canada Agreement, which entered into rolling reviews after Trump declined to renew it in July.

‘Written in pencil’

After months of appearing reluctant to talk about the delicate, high-wire U.S. negotiations, Carney shifted tactics on Saturday.

He slammed the U.S. for violating the USMCA trade deal with tariffs over the past 18 months and accused the White House of continuously changing its justifications for trade measures, including fentanyl trafficking, Canada’s dairy policy, a television commercial that Trump didn’t like, wildfire smoke and a trade deficit.

“Our government understood before many that America would transform all of its commercial relationships, that it would put a series of tariffs on its closest allies and use economic integration as a weapon,” the prime minister said. “We recognized that sometimes its signature was written in pencil.”

The U.S. is Canada’s largest export market by far, with oil, vehicles and car parts among the largest categories. The U.S. trade deficit with Canada is driven by huge imports of crude from the western provinces.

“Canada fuels American growth: supplying 99% of their natural gas imports, 85% of electricity imports and 60% of crude oil imports,” Carney said. “I don’t think they want us to stop sending it.”

Canada is also the largest buyer of U.S. goods and services aside from the European Union, according to data from the U.S. Commerce Department.

Ontario Premier Doug Ford advised Carney this week to consider “dollar-for-dollar” retaliation if the talks failed. In a letter to the prime minister, he highlighted Canada’s energy and critical mineral assets as points of negotiating leverage, and he also suggested additional tariffs on products from “politically significant” states for Trump, such as Florida, Texas, Iowa and Wisconsin.

“Products from these states should face the full force of Canada’s response,” Ford wrote in the letter, which was released by his office Saturday.

Surveys suggest Carney has broad public support for pushing back against aggressive U.S. trade tactics. A poll of Canadians published this week by Leger Marketing found 56% wanted the government to “take a hard line and make no more concessions.”

The same poll found support for measures such as export taxes on energy the U.S. buys from Canada and special taxes on U.S. services such as Netflix.

Jason Kenney, a former Alberta premier and a political rival of Carney’s Liberal Party, praised the prime minister for walking away from the negotiations.

“Canada clearly made a serious, good faith effort to get greater stability and market access, and remains ready to find a fair, balanced agreement,” Kenney said in a social media post. “But we are not cravenly surrendering in the face of constant economic and political aggression.”

Many Canadians are likely to continue retaliating in their own way — with some encouragement from elected politicians — by spurning trips south and boycotting U.S. products. Canadian travel to the U.S. has fallen sharply since Trump returned to the White House, hurting border states and tourist destinations such as Las Vegas.

Asked if part of his calculation in hitting back was based on polling numbers and the U.S. bond market, which has seen yields spiking, Carney said it wasn’t. But he added: “Markets sometimes ignore these fundamentals, and then all of a sudden they focus on them.”

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(With assistance from Nojoud Al Mallees.)

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