US-Canada trade war escalates as Trump threatens tariff hike on autos after Carney vows to retaliate
US-Canada trade relations have deteriorated as President Trump threatens to increase tariffs on Canadian auto imports to 50% starting January 1. Canadian Prime Minister Mark Carney has vowed to retaliate with reciprocal tariffs, following the collapse of trade negotiations over last-minute demands.
Why it matters
This escalation threatens to disrupt the integrated North American automotive supply chain and could trigger a broader trade war between two of the world's largest trading partners.
Image source, EPA Image caption, Donald Trump accused Canada on Monday of "ripping America off", threatening to hike US tariffs on Canadian autos in the new year
President Donald Trump has threatened to hike US tariffs on automobiles originating in Canada, as the trade war between the two neighbours continues to heat up.
Trump said on Monday that he will increase tariffs on Canadian cars and trucks, as well as auto parts, from 25% to 50% as of 1 January.
It comes after US-Canada trade talks collapsed late last week, with each side accusing the other of making unreasonable last-minute demands.
Prime Minister Mark Carney called Trump's latest levy threat unsurprising and accused the president of wanting to destroy Canada's auto industry. He added that Canada is ready to resume talks if the US comes with the "right attitude".
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