US-Canada trade war escalation may push both sides to negotiate

The U.S. and Canada have escalated their trade war with new tit-for-tat tariffs, though analysts expect a deal to eventually end the conflict neither country wants. Canadian Prime Minister Mark Carney responded to 50% U.S. tariffs on certain goods with similar duties on $20 billion of American imports. Talks collapsed Friday after Canada walked away, with Carney saying the U.S. sought to destroy major Canadian industries. New U.S. tariffs cover only about 5% of Canada's exports, and retaliatory measures won't take effect until Sept. 8, leaving time for negotiations. The countries did $880 billion in trade last year, and Canada sends 72% of its exports to the U.S. Analysts suggest political pressure ahead of the Nov. 3 midterms may push both sides toward compromise.