Canadian Prime Minister Mark Carney suspended trade negotiations with the United States late Friday, citing what he described as "unfair" last-minute changes to Washington's proposed terms and announcing retaliatory tariffs against the U.S.

Carney said the decision came as President Donald Trump's 50% tariffs on roughly $28 billion in Canadian goods were set to take effect at midnight.

The breakdown came only days after Trump paused the duties for three days and announced that the U.S. and Canada had reached a "DEAL!" pending final documentation.

The rupture is a sharp turn in one of the world's largest bilateral trading relationships. The two countries exchange hundreds of billions of dollars in goods and services each year, much of it governed by the U.S.-Mexico-Canada Agreement, the 2020 pact scheduled for a joint review by its member countries in 2026.

Although Carney said there had been progress in recent weeks toward improving Canada's position and reaching an agreement with the U.S., he said the two sides were ultimately unable to finalize a deal.

"However, that progress has not been enough to meet our objectives for Canadians," Carney said in a statement.

"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," he continued. "They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute. However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal."

The Office of the U.S. Trade Representative (USTR) gave a different account, saying Canada declined to finalize terms that had been agreed to earlier in the week.

"Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week," USTR Jamieson Greer said in a statement. "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."

Greer said the U.S. had offered Canada major tariff reductions on steel, aluminum, autos and lumber, along with a broader economic and national security partnership covering areas including digital trade, critical minerals, aerospace and export controls.

Those sectors sit at the heart of deeply integrated cross-border supply chains. In the auto industry, for example, components routinely cross the U.S.-Canada border several times before a finished vehicle is assembled, which is why tariff changes in these categories draw close attention from manufacturers on both sides.

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

Carney said Canada would respond by matching the U.S. tariffs.

"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," he said.

"In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly $25 billion in support provided over the past 18 months," Carney added.

His reference to nearly $25 billion in support over the past 18 months underscores that Canadian workers and businesses have already absorbed an extended period of trade disruption, including the round of tariffs announced in June.

Trump said late Tuesday that he was pausing the new tariffs on Canadian goods that were originally scheduled to take effect Wednesday.

The duties would have covered roughly $20 billion in Canadian imports, including liquor, dairy products, vehicles, hockey equipment and other goods. Certain food products, wearables, synthetic materials and industrial goods were also expected to be affected.

The breadth of that list, spanning groceries, sporting goods and industrial materials, illustrates how far the measures reach beyond heavy industry into everyday consumer products on both sides of the border.

The Trump administration announced the tariffs on certain Canadian imports in June, citing what officials described as trade "discrimination" against American businesses.

The immediate question now is whether the two sides return to the table, with Carney having pledged additional support for workers and businesses "in the coming days" as the dollar-for-dollar retaliation begins.

This is a developing story. Check back for updates.