US-Canada trade war heats up as Trump threatens to hike auto tariffs

Meanwhile, Ontario’s outspoken premier, Doug Ford, whose province is home to Canada’s auto manufacturing industry, responded to Trump’s tariffs and threats by telling the US president to “kiss my ass”.

Ford also suggested that Canada should charge the US extra for its oil and gas, as well as electricity and critical minerals, adding that he will be speaking to Carney on ways to “fight back”.

His comments appeared to catch the attention of Trump, who in a Truth Social post accused Ford of “bluster” and wrote: “Someone should get these clowns to ‘fall in line’ or, the consequences for Canada will be far WORSE!”.

Canada accounts for 60% of total US crude oil imports and close to 100% of US natural gas exports, according to Canadian government data.

Businesses on both sides have warned that they stand to be impacted by the new wave of US tariffs on Canada, as well as the “dollar-for-dollar” retaliatory tariffs that Canada plans to impose on 8 September.

The trade war also put into question the future of an existing North American trade pact, known as the UMSCA, that was signed by Trump in his first term with Canada and Mexico.

During a mandatory review this summer, both Canada and Mexico said they want the USMCA extended for another 16 years. The US, however, said it will not renew in its current form.

The pact underpins $1.6tn in North American trade.

Experts with Oxford Economics warned on Monday that a dismantling of USMCA could have dire economic consequences for Canada.

“While unlikely, escalating trade tensions means the risk of the USMCA unravelling has increased, which would plunge Canada into recession and leave it on a permanently lower growth path,” warned Head of Canada Economic Tony Stillo and Senior Economist Michael Davenport.