US-Canada Trade War Escalates: Trump Threatens Further Tariff Hikes After Trudeau Retaliates

File Photo. (IANS)

The trade war between the United States and Canada is likely to escalate further after Canadian PM Justin Trudeau responded to US President Donald Trump with counter-tariffs. Now, Trump has again hit back at Trudeau, warning him that he will further mount his trade war after the Canadian PM announced retaliatory tariffs on US goods. Trump's remark came after Trudeau said on Tuesday that Ottawa will be implementing 25 percent tariffs against $155 billion worth of American products.

On Tuesday itself, the US President took to his social media platform Truth Social, "Please explain to Governor Trudeau, of Canada, that when he puts on a retaliatory tariff on the US, our reciprocal tariff will immediately increase by a like amount!" Trump's 25 percent tariffs on imports from Mexico and Canada took effect on Tuesday, prompting Trudeau to announce retaliatory tariffs on more than $100 billion of American goods that will take effect over 21 days.

The US President has repeatedly referred to the Canadian Prime Minister as the "Governor" of Canada in recent weeks as he called for the country to become the US's 51st state. Trudeau told reporters in Ottawa on Tuesday that Trump's "dumb" trade war was motivated by a desire "to see a total collapse of the Canadian economy because that'll make it easier to annex us." "Now, first of all, that's never going to happen," said the Canadian leader. 

"But yeah, he can do damage to the Canadian economy … But he is rapidly going to find out, as American families are going to find out, that that's going to hurt people on both sides of the border," Canada said it will challenge the US measures at the World Trade Organisation and through the US-Mexico-Canada trade agreement.

"Canadians are reasonable, and we are polite, but we will not back down from a fight," said Trudeau, who will step down as Prime Minister after the governing Liberal Party chooses a new leader on Sunday. Ontario Premier Doug Ford said he would issue a 25 percent export tax on electricity sold to the US and may later cut it off completely if the US tariffs persist. In 2023, Ontario powered 1.5 million homes in Michigan, New York, and Minnesota.

Meanwhile, Mexican President Claudia Sheinbaum joined Canada and China—which was also hit Tuesday with a doubling of duties on goods to 20 percent—in promising to respond to the tariff hikes imposed by the Trump administration.

"There is no motive or reason, nor justification that supports this decision that will affect our people and our nations," she said during a daily news conference in Mexico City, signaling that she would announce US products to be targeted by Mexico on Sunday.