Mark Carney, the Prime Minister of Canada, has said his country is "at war" after President Trump hit the country with a series of tariffs.
Negotiations between the US and its northern neighbours collapsed late on Friday, causing Washington to slap Canada with a steep 50 per cent tariff on goods including wine, dairy, cement, clothing and hockey equipment.
Now Mr Carney, who was once the Governor of the Bank of England, has hit out at the US, saying: "We were attacked. You’re at war when you get attacked. We got attacked.
"That's fine. We've got the reserves. We've got the resilience. We've got the plan. We've got the focus. We will respond."
The Canadian Prime Minister said the US "asked too much and offered too little", claiming that Washington was not interested in a "true economic partnership" with Ottawa.
Mr Trump accused Canada of wanting "the benefits of being a state without being one" in a post on Truth Social early Sunday.
"They have also charged our great farmers, for many years, massive amounts of tariffs. No more!!!" he added.
Diana Furchgott-Roth, an economist who served in the first Trump administration, told GB News Canada had significant leverage in trade negotiations.
She said: "If Canada decided it was going to end its energy exports to the United States, most of New England would stop operating because New England benefits from Canada's hydroelectric, and then the oil industry benefits from the heavy crude that comes from Canada down to the United States to get refined."
Mrs Furchgott-Roth noted that energy, critical minerals and potash, a salt used for fertiliser, were "important imports" exempt from tariffs.
Mr Carney, who leads the Liberal Party, said Canada would hit the US with retaliatory tariffs, set to go into effect on September 8 and has vowed to match the US "dollar for dollar".
US Trade Representative Jamieson Greer said the US's northern neighbour had received the most preferential treatment from the White House.
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On Friday, he said in a statement: "Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week.
"Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days."
The President is using a never-before used provision within the Tariff Act of 1930, also known as the Smoot–Hawley Tariff Act, to implement his fee.
The law gives the President the ability to slap tariffs of up to 50 per cent on imports from countries which discriminate against American commerce.
Mrs Furchgott-Roth told The People's Channel the "clash of personalities" had forced the President to use the "very little used" law.
She said: "And so he has pulled this law basically out of the basement to impose the tariffs on Canada to show.
"And it's difficult to see what President Trump is thinking."
The ongoing feud with Canada is likely to affect Senate races in Michigan and Maine, close races in states with regular Canadian trade.
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