"You're at war when you get attacked; We got attacked," Carney said, in response to a journalist who asked why it felt like a trade war.
That came after Carney announced retaliatory tariffs on US products after trade talks broke down, triggering new US tariffs.
New Canadian tariffs are set to enter force on September 8, Carney said.
The US meanwhile is looking ahead at how to respond further to the retaliation.
In first comments following the failed talks, US President Donald Trump accused Canada of wanting "the benefits of being a (US) State, without being one".
"They have also charged our great farmers, for many years, massive amounts of Tariffs," he wrote on his social media platform Truth Social.
The planned Canadian levies focus on sectors such as steel, dairy products, agricultural equipment and electrical appliances, according to Carney.
"This is a focused response - a focused response to protect and defend our industries and allow them to compete with US products in the Canadian market," the prime minister said.
Carney's move comes in response to new 50 per cent US tariffs on a range of Canadian goods worth around $US20 billion ($A28 billion), including wine, ice hockey sticks, furniture and dairy products, that entered into force after a deadline set by Trump for a deal to be reached passed without an agreement.
As Canada announced the retaliation, US Trade Representative Jamieson Greer said: "This is a missed opportunity for Canada to partner with the United States."
"We don't have new talks planned with the Canadians. We're moving forward with measures that respond to Canadian retaliation," he told Fox News.
Negotiators from the two neighbouring countries had been discussing an agreement late into Friday evening in an attempt to avert Trump's tariffs.
There was talk of reviving the Keystone Pipeline extension, a project long championed by Trump to transport Canadian oil to the US but dropped on objections by environmental groups and Native American tribes.
In return, Canada's provinces could lift their ban on US alcohol sales.
But after the talks broke down, the two sides accused each other of having prevented an agreement through last-minute demands.
Carney said the US was constantly finding new reasons to justify its tariffs on Canada, citing fentanyl, smoke from forest fires, taxes on US tech companies, and a Canadian advert that quoted former US president Ronald Reagan.
Once the US tariffs kicked in, Carney vowed to respond "dollar for dollar".
Earlier, he said he had decided to suspend trade negotiations with the US and directed Canada's negotiators to return to Ottawa, in a statement published shortly before the deadline expired.
"They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute," Carney added.
"However, last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal."
The new tariffs are the latest milestone in Trump's remaking of US trade policy since he returned to office last year.
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