US-Canada trade war escalates as Trump threatens tariff hike on autos after Carney vows to retaliate
A trade war between the US and Canada has intensified as President Trump threatens to double tariffs on Canadian automotive imports to 50%. Canadian Prime Minister Mark Carney has vowed to retaliate, following the collapse of recent trade negotiations.
Why it matters
The breakdown of trade talks between two of the world's largest trading partners threatens to disrupt North American supply chains and increase consumer costs.
President Donald Trump and Canadian Prime Minister Mark Carney/BBC
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.
Late on Monday, Canada officials announced a news conference on Tuesday where they would outline how the country would respond to the trade war and work to "protect and support Canadian workers and businesses during these challenging times".
The news conference at 09:00 ET (14:00 BST) will include government leaders in business, finance and economic development.
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