US warns Canada not to think it can win ‘devastating’ trade war

The Trump administration cautioned Canada that engaging in a trade war with the United States would be "foolish," predicting a "devastating" impact on the Canadian economy. Negotiations between Washington and Ottawa failed to yield an agreement, leading to the implementation of new 50% US tariffs on approximately $20 billion worth of Canadian goods, accounting for 5.5% of Canadian exports to the US.

Canada retaliated with matching tariffs, particularly targeting US steel and dairy sectors, set to take effect on September 8. US Transportation Secretary Sean Duffy stated that Canada would "come out worse" from engaging in a trade war with President Donald Trump. He argued that Canada benefits more from trading with the US than the other way around and warned that Prime Minister Mark Carney would return to negotiations "very very quickly" because the consequences for Canada would be "devastating."

Carney remained defiant, accusing the US of attacking Canada through last-minute demands that restricted trade deals with other countries and threatened French language and Quebec culture. The escalating tensions between the allies intensified following Trump's claim that Canada wanted the benefits of being a state without being one.

The rift deepened since Trump's second term began in January 2025, including his repeated threats to make Canada the 51st US state. Despite the economic repercussions, Carney has gained political support at home for standing up to Washington. Canadian retired teacher Stuart Edwards expressed solidarity with Carney, stating that Canadians would "not put up with" the bully in Washington and vowed to fight back.

During the recent talks in Washington, Canada sought relief from Trump's tariffs on autos, steel, and aluminum, which have caused economic hardship, job losses, and strained the once-inviolable trade relationship. The White House alleged "discriminatory treatment" by Canada against US alcohol, automobile, and dairy products, prompting US Trade Representative Jamieson Greer to offer to reduce tariffs on steel, aluminum, and autos and eliminate a recent tariff on Canadian timber. However, Greer stated that no new talks were planned with Canadian negotiators.