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US President Donald Trump has imposed a 50% tariff on a wide range of goods imported from Canada, in retaliation for what he called "unequal treatment" of US cars, dairy and alcohol.
Everyday consumer items like wine and hockey sticks as well as industrial goods such as cement are on the target list. Several key exports, though, will be spared, including energy, potash, critical minerals and fish.
Prime Minister Mark Carney said Canada stands ready to "intensify" trade talks with the US, telling reporters that he had spoken to Trump.
The White House said the duties would take effect in 30 days. It marks a major escalation in trade tensions between the North American neighbours.
Tensions between the major trading partners have been simmering since Trump returned to office in January last year and unleashed a wide-ranging global programme of tariffs, sometimes to pursue objectives not directly linked to trade.
Following the announcement of the new raft of tariffs, Carney told reporters he had spoken to Trump and that the two leaders had agreed to "intensify negotiations in the coming weeks".
"The team and myself look forward to doing that," he said, adding that all options were on the table if the US went ahead with its latest tariffs threat.
Tariffs are taxes on imported goods that are paid to the government by companies bringing in the foreign products.
The US Supreme Court ruled earlier this year that many of Trump's tariffs imposed globally under emergency powers were illegally enacted, but Trump has since sought other legal avenues to push through his flagship trade policy and announced the most recent tariffs on Monday.
The president has said the levies will boost American manufacturing and jobs, but some economists have warned that higher charges on imported goods risks pushing up prices for consumers.
This new round of duties on Canadian goods is helping fuel speculation about a potential announcement of new US tariffs on countries across the world. US Trade Representative Jamieson Greer said on Tuesday that he expected to "see some action soon", when asked on CNBC about the possibility of forthcoming levies.
Canada, which is one of the US's closest trading partners, was one of the few countries to retaliate last year against Trump's tariffs, placing a 25% levy of its own on about C$30bn (£16bn; $21.7bn) worth of US goods.
Carney later dropped some of them.
The new US tariffs add to trade barriers already in place between the two nations.
The US has been maintaining active tariffs ranging from 15% to 50% on Canadian steel, aluminium and copper. It also charges a 35% tariff on Canadian softwood lumber, alongside a 25% tax on non-US parts in cars.
Meanwhile Canada has its own 25% counter-tariff on selected imports of American steel, aluminium and vehicles.
