Canada imposed new tariffs on about $20 billion worth of American imports on Tuesday, escalating a trade dispute with the United States that has strained relations between the two neighbouring countries.

The duties cover products including clothing, cheese, metal parts and wood goods and are intended to match tariffs imposed by US President Donald Trump after trade negotiations between Washington and Ottawa broke down last month.

The latest measures affect only a small proportion of trade between the two countries, but Canadian officials have warned that further retaliation could follow if Washington increases its tariffs.

Prime Minister Mark Carney has taken a firm position against the US measures, describing Canada as being “at war” over the dispute. Canadian officials have pledged to respond to American tariffs on a dollar for dollar basis.

Trump intensified his criticism of Canada shortly before the new duties took effect, targeting Canadian aircraft manufacturer Bombardier on social media and declaring “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”

He also accused Canada of preventing American banks and companies from operating in the country and urged US consumers to avoid Canadian products.

Bombardier rejected the criticism, saying its aerospace products were among the leading US exports and that it manufactures important components, including wings, in California and Texas. The company said its operations support large numbers of jobs in the United States.

The dispute emerged publicly in July after Trump accused Canada of discriminating against American industries and threatened tariffs of up to 50 per cent on selected Canadian goods unless an agreement was reached within 30 days.

Negotiations continued through August, with Trump at times suggesting that an agreement was close. Talks eventually collapsed, with both governments blaming the other for the failure.

Washington subsequently imposed tariffs on hundreds of Canadian imports, including wine, cheese, clothing and hockey sticks. Canada announced plans for retaliatory measures after Labor Day, with Tuesday’s tariffs fulfilling that pledge.

The dispute comes as the Trump administration prepares further tariffs on dozens of countries it accuses of unfair trade practices. The measures are expected to target countries Washington says have overproduced goods and contributed to persistent US trade deficits.

Trade groups have warned that continued retaliation could increase costs for businesses and consumers in both countries as the dispute develops.