Transportation Secretary Sean Duffy said Canada would be “foolish” to believe it could defeat the United States in an escalating trade dispute as new 50% U.S. tariffs took effect and Ottawa prepared retaliatory duties against American steel and dairy products.
By yourNEWS Media Newsroom.
The Trump administration warned Sunday that Canada faces severe economic consequences if it continues its escalating tariff confrontation with the United States, with Transportation Secretary Sean Duffy predicting Prime Minister Mark Carney will ultimately return to the negotiating table because the dispute could be “devastating for his country.”
The warning came after trade negotiations between Washington and Ottawa collapsed late Friday, triggering new U.S. tariffs of 50% on approximately $20 billion in Canadian goods.
The affected products represent about 5.5% of Canada’s exports to the United States.
Ottawa responded by announcing plans to match U.S. tariffs with Canadian duties of its own, including new levies aimed at American steel and dairy products beginning Sept. 8.
Duffy argued that Canada enters any prolonged trade confrontation from a significantly weaker position because of its dependence on the U.S. market. Roughly 70% of Canadian exports currently go to the United States.
“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,” Duffy told “Fox News Sunday.”
“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.”
Duffy predicted that the economic consequences would eventually force Carney back into negotiations “very very quickly, because it’s going to be devastating for his country.”
Carney showed no indication Saturday that Canada intended to retreat.
The prime minister announced retaliatory tariffs after rejecting what he characterized as a “bad deal” offered by Washington, deepening a rupture between two countries that have historically maintained one of the world’s closest economic relationships.
“You’re at war when you get attacked. We got attacked,” Carney said.
Canada had entered the Washington talks seeking relief from U.S. tariffs on automobiles, steel and aluminum, which have placed pressure on the Canadian economy and contributed to job losses.
The negotiations ultimately fell apart after the United States introduced additional demands late in the process, according to Carney.
He said those conditions included restrictions on Canada’s ability to negotiate trade agreements with other countries.
Carney also accused Washington of making unacceptable “threats” involving the French language and Quebec culture.
President Donald Trump responded Sunday by again criticizing Canada’s relationship with the United States.
“Canada wants the benefits of being a State, without being one!!!” Trump said.
“They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!”
The exchange added another layer to a broader deterioration in U.S.-Canadian relations since Trump returned to the White House in January 2025.
Trump has repeatedly suggested that Canada should become the 51st U.S. state, comments that have further strained relations and fueled political resistance north of the border.
Carney has argued that the economic relationship with Washington has permanently changed and that Canada must reduce its dependence on the United States.
His confrontation with Trump has also generated political support domestically since Carney took office two months after Trump began his second term.
That resistance was reflected Saturday in Fort Erie, Ontario, near the Peace Bridge, a major commercial crossing through which billions of dollars in trade move between the countries each year.
“We have a bully in Washington,” retired Canadian teacher Stuart Edwards told AFP.
“We’re not going to put up with it, Canada isn’t. We’ll fight back,” he said.
The Trump administration has defended its tariffs by accusing Canada of providing “discriminatory treatment” to American products, specifically alcohol, automobiles and dairy goods.
Washington has also argued that the concessions offered during negotiations would have been unusually favorable to Canada.
U.S. Trade Representative Jamieson Greer told The New York Times on Saturday that the administration had proposed reducing tariffs on Canadian steel, aluminum and automobiles while eliminating a newly imposed tariff on Canadian lumber.
Greer said the package would have given Canada “the most preferential treatment of any trading partner.”
Canada nevertheless rejected the terms.
Greer also said there were no plans for another immediate round of negotiations with Canadian officials, leaving both governments to proceed with their respective tariff measures.
The impasse now places substantial pressure on a trading relationship deeply integrated across manufacturing, agriculture and other industries.
Canada’s heavy dependence on U.S. customers gives Washington considerable leverage, while retaliatory Canadian tariffs could raise costs for U.S. companies and industries that rely on cross-border commerce.
For the Trump administration, the central argument is that the disparity in dependence will ultimately determine the outcome.
With approximately 70% of Canadian exports flowing south to the United States, Duffy said Ottawa would bear substantially greater economic damage if Carney chooses to continue the confrontation.
Canada, however, is moving forward with retaliation, setting the stage for another escalation when its new steel and dairy tariffs take effect Sept. 8.
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