US-Canada Trade War Threatens Global Economy

A trade war between the US and Canada could have far-reaching consequences for both countries and the global economy. The dispute has escalated after the Trump administration imposed 50% tariffs on various Canadian goods, prompting Prime Minister Mark Carney to vow dollar-for-dollar retaliation.

Total trade between the two nations reached $715 billion last year, with Canada being the US's second-largest trading partner ahead of China. A protracted spat could inflict significant damage on Canada's economy and even trigger a recession.

The potential for escalation is large, with the USMCA agreement under threat. The revised version of NAFTA has been in place for six years but may be wound down unless the three countries agree on fresh revisions. Trump's statements on the deal have raised concerns about its future.