Some trade watchers see a narrow, but rapidly closing, window for de-escalation
WASHINGTON, D.C. — What a difference a few days make. Rather than cutting the deal U.S. President Donald Trump hailed early last week, the United States and Canada entered an escalating tariff conflict over the weekend that threatens to become a full-blown trade war.
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Prime Minister Mark Carney pulled his negotiating team back from Washington late Friday and has threatened dollar-for-dollar retaliatory tariffs in response to the newly imposed 50 per cent Section 338 tariffs Washington placed on about $28 billion worth of Canadian exports to the U.S. on Saturday.
The relationship “is worse than it has been at any point in my lifetime, and I think you you’re digging out your history books to go back to the period before the First World War when things between Canada and the United States were so rocky and tense and characterized by what you have to call a trade war of this magnitude,” said Graeme Thompson, a senior analyst with the Eurasia Group.
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Since the talks broke down, both sides have pointed fingers over last-minute demands and surprises. Trump has since posted on social media about Canada being unfair toward the United States, and on Monday, he threatened to raise U.S. tariffs on imported cars, trucks, auto parts and steel from Canada to 50 per cent, starting in January 2027.