US-Canada Trade War Escalates as Tariffs Reach $20 Billion

The trade spat between the US and Canada is escalating, threatening to disrupt global supply chains. The Trump administration imposed 50% tariffs on Canadian goods worth $20 billion, affecting only 5.5% of Canada's exports to America.

Canada is the US's second-largest trading partner, with bilateral trade reaching $715 billion last year. Prime Minister Mark Carney has vowed dollar-for-dollar retaliation, while Trump has threatened 50% tariffs on Canadian cars and automotive parts if no deal is reached by January 1.

The spat could inflict heavy damage on Canada's economy, potentially triggering a recession. US consumers and companies may also suffer from tariff costs, lost exports, or higher inflation.