'They asked too much': Canadian dollar slides as Ottawa and Washington head for all-out trade war

The Canadian dollar dropped on Monday morning after trade talks between Ottawa and Washington fell apart, leaving both sides facing higher prices on a wide array of imported goods and threatening Canada's economic growth.

The U.S. on Saturday slapped 50% tariffs on around $20 billion worth of imports from Canada, its second-biggest trading partner after Mexico. The affected goods span dairy, wine, wood products, furniture, cement, ceramics and a slew of other areas.

Canadian Prime Minister Mark Carney said he would retaliate "dollar for dollar" with tariffs starting Sept. 8, targeting sectors such as steel, dairy, agricultural equipment, paper and electronics. Details will be released "in the coming days," Carney added.

The Canadian dollar was 0.58% lower against the U.S. dollar at 8 a.m. ET. The loonie also dipped against the euro, pound and yen.

Negotiators had been scrambling to strike a deal all week. But rhetoric turned sour by the weekend, with each side blaming the other for failing to reach an agreement and for unfair trade practices.

Speaking to CNBC on Monday , U.S. Trade Representative Jamieson Greer said a deal was close, but that in the "last hours," the Canadians "wanted more" than Washington was willing to offer.

"We offered them the best access to the United States of any country in the world. Obviously, there's always going to be tariffs, and there's going to be that protection for American workers and companies."

"But we sought to accommodate the Canadians by ... cutting tariffs in half on steel, on aluminum, and extensively reducing them on autos, and even on things like softwood lumber, accommodating some element of that. Things that are sensitive for the Canadians. They simply ... wanted more," Greer said.