US-Canada trade war escalates as Trump threatens tariff hike on vehicles

President Donald Trump has threatened to hike US tariffs on automobiles originating in Canada, as the trade war between the two neighbours continues to heat up.

Trump said on Monday that he will increase tariffs on Canadian cars and trucks, as well as auto parts, from 25% to 50% as of 1 January.

It comes after US-Canada trade talks collapsed late last week, with each side accusing the other of making unreasonable last-minute demands.

Late on Monday, Canada officials announced a news conference on Tuesday where they would outline how the country would respond to the trade war and work to "protect and support Canadian workers and businesses during these challenging times".

The news conference at 11:00 ET (16:00 BST) will include government leaders in business, finance and economic development.

Earlier in the day, Prime Minister Mark Carney called Trump's latest levy threat unsurprising and accused the president of wanting to destroy Canada's auto industry. He added that Canada is ready to resume talks only if the US comes with the "right attitude".

The war of words followed several US and Canadian officials saying that talks were suspended with no set date to resume.

Canada walked away from trade negotiations late on Friday night, moments before a US-imposed deadline that would add a 50% levy on nearly $20bn (C$28bn; £14bn) of Canadian imports.