Carney faces crucial test after walking away from Trump's deal

The United States and Canada have entered into uncharted territory.

The longtime allies and economic partners, who have enjoyed free trade for decades, are now in an escalating trade war with no clear off ramp.

And for Prime Minister Mark Carney, the late night decision to suspend talks with President Donald Trump and to retaliate instead of agreeing to a deal that seemed in reach will be a significant political test.

He is one of the first world leaders to walk away from the negotiating table with the White House - and the outcome will be closely watched.

Both sides have blamed last-minute changes for torpedoing the tentative deal, with Carney saying the US "asked too much" and "offered too little".

Carney's decision will challenge the appetite among Canadians to accept some economic pain as Ottawa pushes for more US concessions.

After rejecting Trump's high pressure tactics, and in choosing to hit back against the latest duties, Carney will need to convince Canadians that the economic pain is worth the cost of standing up to the Trump administration in search of a better agreement in the long run.

In remarks on Saturday, he said "we take this step confident this is in the best interest of Canada" and accused the US of a "power play" by seeking eleventh-hour changes.