In an escalation of the trade dispute between the US and Canada, President Donald Trump has threatened to increase tariffs on automobiles and auto parts imported from Canada by 50% starting January 1st. This follows the collapse of trade talks last week, with both nations accusing each other of making unreasonable demands at the last minute. The Canadian government will hold a news conference on Tuesday to outline their response to the trade war and support for affected workers and businesses. Prime Minister Mark Carney has accused Trump of wanting to destroy Canada's auto industry and stated that Canada is ready to resume talks only if the US comes with the "right attitude". The breakdown in negotiations could lead to growing tensions, reciprocal tariffs, and potential harm to businesses on both sides, including a Portland-based clothing company. Meanwhile, Ontario Premier Doug Ford has suggested charging the US extra for oil, gas, electricity, and critical minerals. The trade war also raises questions about the future of the USMCA, a trade pact between the three North American countries, with experts warning that the risk of the USMCA unravelling could plunge Canada into recession and leave it on a permanently lower growth path.