US-Canada Trade War Heats Up as Trump Threatens Auto Tariff Hike
BBC News reports on the intensifying trade dispute between the US and Canada.
President Trump has escalated tensions by threatening to increase US tariffs on Canadian automobiles and auto parts from 25% to 50% effective January 1st. This comes after failed trade negotiations between the two countries, which broke down on Friday.
Prime Minister Mark Carney responded to Trump's move, calling it unsurprising and accusing him of aiming to damage Canada's auto industry. Canada stands ready to resume talks, provided the US approaches with the right attitude.
The breakdown in negotiations followed a deadlock over last-minute demands from both sides. Canadian officials cited unacceptable US proposals, while US officials blamed Canada for introducing new conditions.
Trump's latest tariff threat follows Canada's decision to walk away from the negotiating table on Friday, moments before a US-imposed deadline that would have triggered a 50% tariff on nearly $20bn (C$28bn; £14bn) of Canadian imports.
This abrupt turnabout marked a striking change in tone from earlier in the week, when optimism was high for a new US-Canada trade agreement.
Carney's response included a pledge to counter US tariffs with reciprocal levies on US goods dollar for dollar. He also announced a C$11bn (US$7.95bn; £5.83bn) investment in six new icebreakers for the Canadian Coast Guard, aiming to diversify Canada's trade and open winter shipping routes through its northern and Atlantic waters.
Ontario's Premier Doug Ford, a vocal critic of Trump's tariffs, responded with defiance, telling the President to "kiss my ass." He also suggested that Canada should impose extra fees on US purchases of oil, gas, electricity, and critical minerals.