US and Canada trade war escalates, but deal to avert full conflict still possible

The US and Canada have escalated their trade war with new tit-for-tat tariffs, though analysts expect a deal to avert a full conflict. Both sides remain publicly defiant. Canadian Prime Minister Mark Carney responded to 50% US tariffs by targeting $20 billion in American imports, while Ontario Premier Doug Ford threatened to cut electricity and mineral shipments. President Donald Trump countered with auto tariff threats. Retaliatory tariffs take effect September 8, and US auto tariffs would not apply until January 1, leaving time for negotiation. The two countries traded $880 billion last year, with Canada sending 72% of exports to the US.