Aug. 22 (UPI) — A 50% tariff on Canadian goods went into effect early Saturday after talks between the two countries collapsed.

Canadian Prime Minister Mark Carney walked away from the negotiations and said Canada would retaliate against the tariffs.

Negotiators had been in Washington, D.C., working with U.S. Trade Representative Jamieson Greer to try to come to an agreement. But just before the midnight deadline Friday, Carney released a statement on X announcing that there would be no deal.

“In recent weeks, we made important progress toward improving Canada’s position as having the best deal in the world with the U.S. However, that progress has not been enough to meet our objectives for Canadians. As a result this evening I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Carney said in the statement.

“At midnight tonight, the U.S. intends to impose a 50% tariff on roughly $28 billion of Canadian goods. Canada will match those tariffs dollar for dollar to protect our workers and businesses,” Carney added.

Greer posted a statement on X saying, “Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.”

“This is a missed opportunity for Canada to partner with the United States, which is the fastest growing economy in the G7,” Greer said.

President Donald Trump signed orders in July to add the new tariffs on goods, including cement, hockey sticks, beer, cheese and other items that would make up about 2% of the entire trade between the two countries.

They were set to take effect at 12:01 a.m. Wednesday, but Trump extended the deadline to Friday night. He announced on Truth Social about 90 minutes before the deadline, saying the two countries “have a DEAL!”

Carney responded on X: “Substantial progress has been made, although there is important work still to be done.”

Analysts have said this is bad news for the United States and Canada.

“Economically, [the new tariffs are] not that important – except that the relationship itself is extremely important,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics, a nonpartisan research organization, The Washington Post reported.

Candace Laing, CEO of the Canadian Chamber of Commerce, said it will hurt both countries economically.

“This will be a body blow to North American competitiveness in this self-defeating trade saga,” Laing said in a statement. “Americans will see their costs go up, and Canadians will see customers, investment and small businesses disappear.”