The shopkeeper has just asked you if you are an American. He cannot tell the difference in Canadian and American accents. Americans are not popular in Britain at the moment. Americans sometimes aren't very appreciative of British ways, they can be very noisy, and they flash their wealth around too much. As well, The USA decided to stay neutral instead of joining the Allies and the Americans have been complaining about the British naval blockade preventing them from selling supples and manufactured goods to the Germans.

Your response led the shop keeper to think you are an American. He tries to "pull a fast one" with his prices and he acts rudely to you and your buddies. Later on, a local explains the situation to you and the locals give you much better treatment.