The Canadian team working on a trade deal with the United States could walk away from talks in the wake of a U.S. decision to impose a 35% tariff on some goods from Canada, an adviser to Prime Minister Mark Carney said on Friday.

Trump has justified tariffs on goods from Canada, the top U.S. export market, by accusing it of failing to stop the cross-border flow of fentanyl, even though U.S. government data shows Canada accounts for only 1% of the fentanyl that enters the United States.

As the trade war has progressed, the Canadian government has imposed 25 per cent counter-tariffs of its own, beginning March 4 with a slate of levies on $30 billion in U.S. imports, followed by another $29.8 billion on March 13.