US-Canada trade war escalates as Trump threatens 50% auto tariffs, Carney vows retaliation

The US-Canada trade war is escalating, with President Donald Trump threatening to double tariffs on Canadian vehicles to 50% and Ottawa announcing retaliatory measures. The new conflict follows the collapse of trade negotiations between the close allies. Trump announced Monday that tariffs on Canadian cars, trucks, and auto parts would rise from 25% to 50% starting January 1. Canadian Prime Minister Mark Carney accused Trump of seeking to destroy Canada's auto industry and said his government will respond with dollar-for-dollar countermeasures, with details expected Tuesday. The talks collapsed Friday after Canada rejected what it called "unacceptable" last-minute US demands, including restrictions on its trade agreements. Ontario Premier Doug Ford suggested raising energy export costs, while economists warn the dispute threatens the USMCA trade deal, potentially pushing Canada into recession.