Trump admin predicts US trade war 'devastating' for Canada

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.

"We're great trading partners, right? But Canada gets the benefit of trading with the US way more than the US gets the benefit of trading with Canada," he told the "Fox News Sunday" talk show.

"To think that they're going to go to war with Donald Trump and actually win that war with the US, I think it's foolish on their part."

He predicted that Canadian Prime Minister Mark Carney would return to negotiations "very very quickly, because it's going to be devastating for his country."

Carney was defiant on Saturday, announcing retaliatory tariffs on the US after walking away from a "bad deal" on trade as the rift between the longtime allies deepened.

"You're at war when you get attacked. We got attacked," Carney said.

Carney cited last-minute US demands that would restrict Canadian trade deals with other countries and unacceptable "threats" to the French language and Quebec culture.

Trump hit back early Sunday, saying, "Canada wants the benefits of being a State, without being one!!!"

"They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!" Trump added in a post on Truth Social.

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.

Carney has said bilateral relations have been forever changed, and that Canada must reduce its reliance on the United States. Despite the economic fallout, he has won political support at home for his willingness to stand up to Washington since taking office two months after Trump returned to the presidency.

"We have a bully in Washington," Canadian retired teacher Stuart Edwards told AFP Saturday in Fort Erie, Ontario in the shadow of the Peace Bridge, a conduit for billions of dollars in annual trade with the United States.

"We're not going to put up with it, Canada isn't. We'll fight back," he said.

In the recent talks in Washington, Canada was seeking relief from Trump's tariffs on autos, steel and aluminum, which have battered the country's economy, forced job losses and strained what was once an iron-clad trade relationship.

The White House had alleged "discriminatory treatment" by Canada against US alcohol, automobile and dairy products in introducing the duties.

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.