US-Canada trade war escalates as Trump threatens tariff hike on autos after Carney vows to retaliate
Mark Carney accused Trump of wanting to "destroy" Canada's auto industry, and said he would only resume trade talks if the US comes with the "right attitude".
President Donald Trump has threatened to raise US tariffs on Canadian-made automobiles and auto parts from 25% to 50% as of January 1st. This escalation in the US-Canada trade war comes after a collapse in trade talks between the two nations. Prime Minister Mark Carney accused Trump of wanting to destroy Canada's auto industry and vowed to retaliate by imposing dollar-for-dollar tariffs on US goods.
Carney also announced C$11bn ($7.95bn; £5.83bn) in funding to build six icebreakers for the Canadian Coast Guard to strengthen Canada's trade diversification. Ontario Premier Doug Ford urged the US to "kiss my ass" and suggested Canada should charge the US extra for oil, gas, electricity, and critical minerals. The trade war also casts doubt on the future of the USMCA, a North American trade pact signed by Trump with Canada and Mexico.
If the US does not renew the pact in its current form, experts warn it could plunge Canada into recession and cause long-term economic stagnation.
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