By Max Saltman and David Goldman, CNN

(CNN) — Canadian Prime Minister Mark Carney told President Donald Trump Wednesday that his nation will retaliate against the United States with tariffs of its own if Trump presses forward with his promised levies – potentially escalating what is already developing into an ugly and damaging trade war.

The leaders of the bordering nations spoke Friday before the White House’s expected tariffs go into place April 2 – a day Trump has been calling America’s “Liberation Day.” The call came a couple days after Trump announced new tariffs on automobiles and parts on Wednesday, upending decades of free trade between the nations.

In a statement Friday, Carney’s office said Canada plans to implement retaliatory tariffs on US goods next week in response to Trump’s promised import taxes. But Carney offered no specifics – including timing and the scope of the retaliatory tariffs.

“The Prime Minister informed the President that his government will implement retaliatory tariffs to protect Canadian workers and our economy, following the announcement of additional U.S. trade actions on April 2, 2025,” the Prime Minister’s Office said in a press release.

Still, Carney and Trump sounded a hopeful note after the call – a noticeable change in tone from the fractious relationship between former Prime Minister Justin Trudeau and Trump.

Friday’s call was the first between the two leaders. Carney’s office described it as a “very constructive conversation,” and Trump said in a social media post that the call was “extremely productive.”

“The leaders agreed to begin comprehensive negotiations about a new economic and security relationship immediately following the election,” the statement said, referring to Canada’s federal election scheduled for April 28.

In the interim, ministerial-level talks around trade are expected to “intensify to address immediate concerns,” the statement added.

Nevertheless, Carney warned yesterday that Canada’s relationship with the United States had fundamentally changed given the Trump administrations’ tariff threats and said Canada has “a number of measures that we can take in response.”

Tariff escalation

Canada has already threatened and imposed a number of retaliatory measures against the United States.

When Trump temporarily imposed 25% across-the-board tariffs on almost all Canadian goods, Canada immediately placed a 25% tariff on more than $20 billion of US imports, including dairy products, meats, grains, wine, beer, apparel, footwear, motorcycles, cosmetics and certain pulp and paper products. Canada also threatened additional tariffs on $86.2 billion of goods in the future if the tariffs didn’t come off (they mostly did – at least until April 2).

“This is a very dumb thing to do,” said Trudeau on March 1, directing his remarks at Trump. “We two friends fighting is exactly what our opponents around the world want to see.”

Ontario Premier Doug Ford also imposed a 25% surcharge on electricity sent to New York, Minnesota and Michigan, which he estimated would add around “$100 per month to the bills of hardworking Americans.” Ford said if the tariffs didn’t come off, he wouldn’t hesitate to shut off all electricity Canada delivers to America.

Trump fired back, threatening a 50% tariff on Canadian steel and aluminum – up from the 25% tariff he imposed on March 12. Ford and Trump ultimately backed off their threats, and Ford dropped the surcharge.

But the escalation shows “there are no winners in a trade war,” as Canadian and Chinese leaders have repeatedly said during the tit-for-tat trade spat with the United States.

It’s unclear how the Trump administration might respond to retaliatory tariffs from Canada. He has threatened a tariff of up to 250% on Canadian dairy – a high but ultimately meaningless threat, because the United States imports very little dairy from its northern neighbor. But Trump has also said he would place significant tariffs on Canadian timber, which could do real damage to the price of lumber in the United States.

After the European Union retaliated against US steel and aluminum tariffs with retaliatory tariffs of its own, Trump threatened a 200% tariff on European alcohol. The EU has since delayed its retaliation, and Trump hasn’t followed through with his threat.

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