WASHINGTON — The Trump administration on Sunday warned that Canada would be "foolish" to think it could win a trade war with the United States, predicting a "devastating" impact on its northern neighbor. The warning came as negotiations between Washington and Ottawa remained deadlocked over tariffs and trade terms.
Speaking on condition of anonymity, a senior administration official said the US economy is far larger and more diversified than Canada's, and that any prolonged trade conflict would disproportionately hurt Canadian industries, particularly manufacturing and agriculture. The official added that the US has other trading partners to turn to, while Canada relies heavily on the US market for about 75% of its exports.
Canadian officials have pushed back, arguing that the US also depends on Canadian energy, minerals, and manufactured goods. However, economists note that Canada's economy is roughly one-tenth the size of the US economy, making it more vulnerable to trade disruptions.
The dispute has already led to retaliatory tariffs on both sides, affecting goods such as steel, aluminum, and agricultural products. Talks are expected to resume later this week, but no breakthrough has been announced.
