CANADA was set to announce retaliatory tariffs against the United States last night after relations between the two countries deteriorated sharply.

US President Donald Trump told Canadian leaders on Monday to “fall in line” or face consequences “far worse” than existing tariffs, while Prime Minister Mark Carney accused Washington of trying to subordinate Canada.

Mr Trump also threatened new 50 per cent tariffs on Canadian vehicles, vehicle parts and steel, while Mr Carney said US trade demands showed that Washington wanted to “destroy our major industries,” including vehicle manufacturing, steel and aluminum.

Canadian Finance Minister Francois-Philippe Champagne and three other cabinet ministers were also expected to share details of support for workers affected by tariffs last night. 

Mr Carney said on Monday that Canada may need to move away from matching US tariffs dollar for dollar, instead using more targeted retaliation aimed at protecting Canadian workers and businesses.

“An attitude at the negotiation table that Canada is a subsidiary of the US” is “not something we’re going to accept,” Mr Carney said.

The fiery words from both sides show how US-Canada relations have deteriorated since Mr Carney walked away from trade negotiations with the Trump administration on Friday night, triggering the president’s threatened 50 per cent tariffs the next day on about $20 billion (around £15bn) worth of Canadian goods.

Canada and the US share one of the world’s largest trading relationships, with deeply integrated supply chains across motor vehicles, energy, agriculture and manufacturing, making a prolonged trade fight potentially costly for businesses and workers on both sides of the border.

On Monday, Mr Trump took to social media to blast what he called the country’s “ridiculously high tariffs” on agricultural imports from the US.

Mr Carney hit back at Washington’s automotive sector proposals, saying they would have the effect of gradually dismantling Canadian production.