The Trump administration on Sunday warned that Canada would be "foolish" to think it could win a trade war with the United States, predicting a "devastating" impact on its northern neighbor. Negotiations between Washington and Ottawa broke down late Friday, putting into force new 50-percent US tariffs impacting about $20 billion worth of Canadian goods, or 5.5 percent of Canadian exports to the United States.
Canada in retaliation said it would match US tariffs, with new levies notably targeting the US steel and dairy industries to take effect on September 8. US Transportation Secretary Sean Duffy said Canada would come out worse from tussling with President Donald Trump in a trade war. The United States currently accounts for roughly 70 percent of Canadian exports.
US Trade Representative Jamieson Greer told the New York Times on Saturday that the US had offered to reduce its tariffs on steel, aluminum and autos, as well as eliminate a recently imposed tariff on Canadian lumber. Greer said those measures would have given Canada "the most preferential treatment of any trading partner," according to the Times. He also said no new talks were planned with Canadian negotiators.
The acrimony underscored the deepening rift between the close allies since Trump began his second term in January 2025 -- including his repeated threats to make Canada the 51st US state. Canadian Prime Minister Mark Carney has said bilateral relations have been forever changed, and that Canada must reduce its reliance on the United States.