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The Trump administration issued a stern warning on Sunday, asserting that Canada would be "foolish" to believe it could emerge victorious in a trade war with the United States. The administration estimated a detrimental impact on the northern neighbor, with new 50-percent US tariffs set to impact approximately USD20 billion worth of Canadian goods, representing 5.5 percent of Canadian exports to the United States.

Canada responded by announcing retaliatory tariffs targeting US steel and dairy industries, slated to take effect on September 8. US Transportation Secretary Sean Duffy stated that Canada would suffer more significantly from the trade conflict with President Donald Trump. He claimed that Canada benefits more from its trade ties with the US than vice versa, predicting Prime Minister Mark Carney would return to negotiations "very, very quickly," as the repercussions would be "devastating" for Canada.

Carney, however, remained resolute, terming the situation as an "attack" and citing US demands that would limit Canadian trade deals with other nations and threaten the French language and Quebec culture. The White House claimed it had offered to reduce tariffs on steel, aluminum, and autos, as well as eliminate a recent lumber tariff, to give Canada the most favorable trade terms among its partners, but no further talks have been scheduled with Canadian negotiators.