Carney faces crucial test after walking away from Trump's deal

The United States and Canada find themselves in a new realm of international relations, as the two longstanding allies and economic partners now face an escalating trade war with no clear resolution in sight. Prime Minister Mark Carney's late-night decision to walk away from a seemingly achievable deal with President Donald Trump marks a significant political test.

This action will be closely watched, as both sides have blamed last-minute changes for the collapse of the tentative agreement. Carney claims the US "asked too much" while offering "too little," while Trump's administration has accused Canada of a "power play." As the trade dispute intensifies, Canadians are facing increased economic pressure from US duties and counter-tariffs.

With 70% of Canadian exports heading to the US, the country's top trading partners include several US states, particularly those in Michigan, Kentucky, Indiana, and Ohio. Recent polls suggest that around 36% of Canadians support retaliation against US tariffs, while 56% want the federal government to take a firm stance and make no further concessions.

The boycott of US travel due to tariffs has resulted in a loss of approximately C$3.3bn ($2.35bn; £1.75bn) in revenue for the US last year, with Canadian wine exports to the US plummeting by 78% year-over-year. Canada has vowed to match US tariffs dollar for dollar in response to the breakdown of trade talks.