Canadian Prime Minister Mark Carney accused U.S. President Donald Trump on Monday of seeking to “destroy” his country’s automotive sector, and said trade negotiations would resume only if Washington returned with what he called the “right attitude.”
The remarks followed Trump’s threat to raise tariffs on vehicles, deepening a dispute that has stalled cross-border talks. Carney framed the auto measures as a direct assault on Canadian manufacturing, an industry concentrated in Ontario and tightly integrated with U.S. supply chains.
Trump has moved to lift auto tariffs toward 50%, a step Ottawa says would gut plants that depend on parts and vehicles crossing the border multiple times before final assembly. Carney set no timeline for renewed contact.
The standoff caught financial markets off guard. Investors had recently increased their exposure to Canadian exchange-traded funds, anticipating a settlement, before talks collapsed. That positioning left some funds exposed when the negotiating mood soured rather than improved.
The breakdown reversed expectations built during earlier rounds. In prior weeks the two sides had appeared close to an agreement, with Trump at one point pausing planned 50% tariffs to allow more time for a deal that ultimately did not hold.
Analysts have noted one instrument Washington has so far left unused: Canadian oil. Canada is the largest single supplier of crude to the United States, and much of it feeds refineries in the Midwest configured for heavy Canadian grades.
Restricting or taxing those imports would carry costs on both sides, raising prices for American refiners and consumers while pressuring Canadian producers. That mutual exposure helps explain why energy has stayed outside the tariff exchanges centered on autos and manufactured goods.
Carney has sought to hold a firm line while keeping the door open. He said Canada would not return to the table under pressure, but signaled willingness to engage if the United States adjusted its approach.
The auto dispute is one strand of a broader rupture. Relations have also strained over Ottawa’s dealings with Beijing, with Trump earlier threatening steep penalties if Canada advanced a trade arrangement with China.
No new meeting between the two governments has been scheduled.