New Delhi, Aug. 24 -- The US and Canada are heading into a fresh trade confrontation after negotiations collapsed and both sides moved towards steep retaliatory tariffs, putting businesses and consumers across the two closely integrated economies at risk of higher costs, weaker demand and disrupted supply chains.

Canadian Prime Minister Mark Carney said Ottawa would respond "dollar for dollar" after US President Donald Trump imposed a 50% tariff on around $20 billion worth of Canadian goods. Canada's countermeasures are set to begin on September 8, targeting a range of US products.

The Canadian dollar fell against a slew of major currencies Monday after the U.S. imposed 50% tariffs on around $20 billion worth of its imports.

The escala...