Negotiations between the UK and Canada stopped, following a row over beef and cheese.
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Canada has been pushing for the UK to relax a ban on hormone-treated beef, which its producers say in effect shuts them out of the British market.
The UK have concerns about 245% import taxes Canada put at the start of the year on British cheese.
The pause in talks mean British car firms could also face higher tariffs.
It will also mean the UK's trading terms with Canada will now be worse than when it was part of the EU's deal with the country.
Minette Batters, president of the National Farmers' Union of England and Wales, said she was glad the UK government had not "given way" on hormone-treated beef.
But the British Chambers of Commerce (BCC) and the Society of Motor Manufacturers and Traders (SMMT) described the news as unwelcome.
Downing Street said the government would "only negotiate deals that deliver for the British people", and reserved the right to "pause negotiations where progress is not being made".
Batters said the UK's decision would be a "relief for farmers".
She told BBC Radio 4's Today programme she was pleased the "government has stuck to its line and not given way".
"We have already damaged our economy and agricultural sector by fully liberalising on trade deals with Australia and New Zealand. We had to take a strong line on this."
William Bain, trade policy head at the BCC, said: "For our dairy exporters and parts of our manufacturing industry the loss of key trade preferences puts them in a worse position than before 2020.
"Government must help these sectors through difficult times and open up new markets for our goods and services."
Mike Hawes, the chief executive of the SMMT, said the breakdown in talks sent "a signal that the UK's world-class automotive products are not welcome in Canada".
"If UK car exports can't use EU parts and components to avoid additional duties it creates a risk that tariffs, potentially charged on top of luxury goods taxes, could be reintroduced," he added.
The Canadian Cattle Association said it backed its government's "hard-line approach" on beef rules, adding that the UK had "shown no indication that it is prepared to fully accept Canada's food safety system which is widely recognized as one of the finest in the world". ■