The United States and Canada have failed to reach a trade deal after days of intense, last-minute negotiations, with new 50% US tariffs on around $20 billion worth of Canadian goods taking effect on Saturday.

The tariffs had been delayed by three days to give Washington and Ottawa more time to reach an agreement. But the deadline passed without a final deal, escalating the trade dispute between the two countries.

US Trade Representative Jamieson Greer said Canada had declined to finalise an agreement under terms that Washington believed had been settled earlier in the week. He said the US had offered tariff reductions on sectors including steel, aluminum, automobiles and lumber in exchange for concessions from Canada.

Canadian Prime Minister Mark Carney, however, said the US had made last-minute changes to its proposed terms that Canada considered "unfair" and "uneconomic". He also vowed that Canada would match the US tariffs "dollar for dollar" to protect Canadian workers and businesses.

What happens now?

The new 50% US tariff on a range of Canadian imports is now in effect. The measure affects about 5% of Canada's annual exports to the US, according to the Associated Press.

The affected products include Canadian wine and other alcoholic beverages, dairy products, cement, lumber and other building materials, furniture, sporting goods and some manufactured goods. Hockey sticks and tongue depressors are also among the products covered by the affected categories.

Could products become more expensive in the US?

Potentially, yes — but not necessarily by 50%.

The tariff applies to imports entering the US, meaning companies importing affected Canadian goods will face the new duty. Whether that additional cost is passed on to retailers and consumers will depend on how businesses respond.

As a result, products such as Canadian alcohol, dairy products, building materials, furniture, sporting goods and some manufactured goods could become more expensive in the US if businesses pass the additional cost through the supply chain.

The key point for consumers is that a 50% tariff does not automatically mean a product's retail price will rise by 50%. The final impact on prices can vary depending on the product and how the additional cost is handled.

Canada promises retaliation

Carney said Canada would respond to the US measures with matching tariffs.

The dispute has already led to retaliatory measures against US products. Canadian officials have pointed to the removal of US alcohol and wine from liquor stores as one of the measures that has angered Washington.

The White House has alleged "discriminatory treatment" by Canada against US alcohol, automobile and dairy products in introducing the duties.

If Canada follows through on Carney's promise to match the US tariffs "dollar for dollar", American exporters could also face higher costs when selling affected products in Canada.

The failed negotiations therefore leave businesses on both sides facing fresh uncertainty, while consumers could see price increases on some products if the additional tariff costs are passed through.

With agency inputs