US-Canada trade war escalates as Trump threatens 50% auto tariff after Carney vows retaliation

President Donald Trump threatened to raise US tariffs on Canadian automobiles and parts from 25% to 50% starting January 1, escalating the trade war after talks collapsed last week. Prime Minister Mark Carney accused Trump of wanting to destroy Canada's auto industry and said talks could resume only with the "right attitude" from the US. The threat follows Canada's walkout from negotiations late Friday, just before a US deadline for a 50% levy on nearly $20bn of imports. Both sides blame each other for last-minute demands, with US trade representative Jamieson Greer saying "they wanted more" and Canadian officials citing unacceptable clauses limiting trade deals. Carney pledged reciprocal tariffs "dollar for dollar" and announced C$11bn in funding for six icebreakers at a Quebec shipyard to diversify Canada's trade and replace its ageing Coast Guard fleet. The breakdown marked a shift from earlier optimism about reaching a new US-Canada trade deal.