The trade dispute between the United States and Canada has intensified significantly following the collapse of bilateral trade negotiations.
US President Donald Trump announced plans to raise tariffs to 50% on all Canadian cars, trucks, automotive parts, and steel, effective January 1, 2027.
Trump said manufacturers could avoid the duties by moving production directly to the United States.
The escalation follows three days of failed negotiations in Washington. Trump accused Canada of maintaining unfair agricultural tariffs and taking advantage of the trade relationship for years. Canadian officials, meanwhile, said Washington introduced last-minute demands that were unacceptable, including a clause limiting the countries with which Canada could sign trade agreements.
US Trade Representative Jamieson Greer rejected that claim, saying Canada was responsible for introducing last-minute changes.
Canadian Prime Minister Mark Carney described the situation as a trade war and accused Washington of attempting to undermine Canada’s auto industry. He said Canada was prepared to resume negotiations if the US approached them with the “right attitude”.
Ontario Premier Doug Ford also sharply criticized the tariff threats.
The dispute follows the collapse of trade talks late last week, with both sides accusing each other of making unreasonable last-minute demands.
Canada walked away from negotiations late Friday, shortly before a US-imposed deadline that would have added a 50% levy on nearly $20bn (C$28bn; £14bn) of Canadian imports.
Carney said Canada would respond with reciprocal tariffs on US goods “dollar for dollar” while supporting businesses affected by the new US measures.
Canadian officials also announced plans to outline further measures to protect workers and businesses and to diversify the country’s trade, which has historically relied heavily on the US.
As part of those efforts, Carney announced C$11bn ($7.95bn; £5.83bn) in funding to build six icebreakers at a Quebec shipyard for the Canadian Coast Guard.
The vessels will replace the country’s ageing medium and heavy icebreaker fleet and help open winter shipping routes through Canada’s northern and Atlantic waters.
