Washington, Aug 22: A trade confrontation between the United States and Canada escalated sharply on Saturday after last-minute negotiations collapsed, triggering 50 per cent US tariffs on billions of dollars in Canadian goods and a promise of dollar-for-dollar retaliation from Ottawa.

Canadian Prime Minister Mark Carney suspended the negotiations and ordered his country’s team to return from Washington. He accused the United States of changing its proposed terms at the last minute.

“Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal,” Carney said.

“At midnight tonight, the US 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,” he said.

The Office of the US Trade Representative blamed Canada for the breakdown. It said Ottawa declined to finalise an agreement under terms reached earlier in the week.

“Despite the US 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,” it said.

The US side said its offer included significant tariff reductions covering steel, aluminium, automobiles and lumber. It also proposed cooperation on export controls, transshipment, digital trade, critical minerals and imports made with forced labour.

The package would have included supply-chain coordination in aerospace and the announcement of formal negotiations over the United States-Mexico-Canada Agreement, or USMCA.

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

Carney said Canada had sought tariff-free access for most Canadian businesses, greater stability in bilateral trade and lower US tariffs on strategic industries. Ottawa also wanted to protect small and medium-sized businesses while retaining its independence and economic flexibility.

“We have recognised from the beginning that America has changed, and that we will not return to our old relationship,” he said. “Throughout, our goal has been to secure the best deal for Canadians, never a deal at any price or on any deadline.”

Carney said his government would announce additional assistance for Canadian workers and businesses in the coming days. That would build on nearly $25 billion in support provided during the previous 18 months.

US Senator Peter Welch, a Vermont Democrat and member of the Senate Finance Committee, urged President Donald Trump to withdraw the tariffs.

“These new 50% tariffs on Canadian goods are a continuation of the president’s chaotic economic policies, and a slap in the face to businesses and farmers in Vermont and northern border states across America,” Welch said.

“For the sake of American businesses, American farms, and American families, I urge President Trump to drop these tariffs and find an off-ramp to his reckless trade war,” he added.

Welch is the lead sponsor of the Creating Access to Necessary American-Canadian Duty Adjustments Act. The proposed legislation would exempt American-owned small businesses from tariffs imposed on Canada. He also supports the bipartisan Trade Review Act, which seeks to restore Congress’ role in trade policy.

The latest tariffs add pressure to an already strained relationship. Earlier US duties on automobiles, metals and forest products had prompted retaliatory Canadian measures, while Trump’s repeated remarks about Canada becoming the 51st US state fuelled anger and calls in Canada to reduce its economic reliance on the United States.

Tehran, Aug 22: Iran on Saturday condemned the new economic sanctions by the United States and said that the result would be the “complete erosion of sovereignty as the foundational basis of the UN-based inter-State system”.

The remarks came after US President Donald Trump announced on Wednesday “the most crushing economic operation ever taken” against any country providing a lifeline to Iran.

Iranian Foreign Ministry Spokesperson Esmaeil Baqaei, taking to X, said, “The United States’ declaration of new economic sanctions on Iran is far more than continued unlawful ‘economic warfare’ against a single country. It is an assertion of extraterritorial sovereignty over every independent Member State of the United Nations.”

He further argued that no country can legally compel foreign banks, companies or airports, subject to the “exclusive jurisdiction” of their respective countries, to “abandon lawful commercial relations” with another country.

“Such secondary sanctions find no foundation in international law. They violate the principle of sovereign equality enshrined in Article 2(1) of the UN Charter and breach the customary prohibition on intervention affirmed by the International Court of Justice in the Nicaragua case. Economic coercion designed to force a sovereign State to alter its lawful policy choices constitutes an outright internationally wrongful act,” Baqaei said.

He warned that, when these measures are combined with a naval blockade that amounts to “military aggression”, the US’ demands reduce the sovereignty of other countries to “something provisional, conditional, and susceptible” to being revoked by another power.

“Compliance purchases no immunity or respect; it merely concedes that one’s banks, enterprises, and airports operate only under a foreign licence,” Baqaei added.

He stressed that the final result of this policy would be the erosion of sovereignty as the fundamental basis of the UN Charter.

“The end result would be the complete erosion of sovereignty as the foundational basis of the UN-based inter-State system, and a recipe for an abysmal return to full-scale classic colonialism,” he added.

Indian equity markets ended on a mixed note on Friday, with the benchmark indices largely flat as global equities retreated following a rebound in bond yields, while rising crude oil prices amid simmering tensions between the US and Iran kept investors cautious.

The Sensex gained just 3.11 points to settle at 77,540.83, while the Nifty edged up 20.15 points, or 0.08 per cent, to close at 24,252.00.

Commenting on Nifty technical outlook, experts said that the 24,000–24,200 zone remains the key support base, reinforced by heavy Put open interest at the 24,000 strike.

“On the upside, this week’s high of 24,360 falls within the broader 24,300–24,400 resistance zone, making this the immediate hurdle for the index,” an analyst stated.

“A sustained move above 24,360–24,400 could trigger a quick advance towards 24,500–24,600,” a market expert mentioned.

Despite the marginal gains in the day’s session, both the Sensex and Nifty declined for the second consecutive week, reflecting continued concerns over global market conditions and geopolitical risks.

Among the major Nifty losers, Trent, Maruti Suzuki India and InterGlobe Aviation came under pressure and ended among the top-performing stocks on the downside.

The broader market, however, showed some resilience. The Nifty MidCap index rose 0.1 per cent, while the Nifty SmallCap index gained 0.69 per cent.

Sectorally, the Nifty FMCG, Nifty Auto and Nifty IT indices underperformed the broader market. In contrast, the Nifty Metal and Nifty Private Bank indices emerged as the key outperformers during the session.

Experts said that market sentiment remained cautious as investors continued to track movements in global bond yields, crude oil prices and developments surrounding tensions between the US and Iran.

“The elevated global bond yields continue to cause worry in the market. The recent US Treasury’s move to ease the bond yields failed to provide lasting comfort, given surging crude prices and persistent inflation fears,” the analyst stated.