Canada is preparing to unveil retaliatory tariffs against the United States on Tuesday, an individual familiar with the strategy revealed, heightening a trade conflict that has worsened sharply after negotiations with the Trump administration fell through.

The source requested anonymity as they were not authorized to detail these plans publicly.

Prime Minister Mark Carney stated on Monday that the country may need to pivot away from matching U.S. duties dollar for dollar, choosing instead more targeted countermeasures designed to safeguard domestic workers and businesses.

President Donald Trump escalated the dispute again Monday, telling Canadian leaders to “fall in line” or face consequences “far WORSE” than tariffs already imposed and threatening new 50% tariffs on Canadian vehicles, auto parts and steel.

Carney accused Washington of trying to subordinate Canada and said U.S. trade demands had confirmed Canada’s fears that the United States was seeking to dismantle major Canadian industries.

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

Carney was even more blunt in French.

“We learned during the negotiations that the Americans want to destroy our major industries, including autos, steel and aluminum,” Carney said. “That was one of the main reasons we said no. It was a bad deal.”

The fiery words from both sides show how U.S.-Canada relations have deteriorated since Carney walked away from trade negotiations with the Trump administration late Friday, triggering the president’s threatened 50% tariffs the next day on about $20 billion worth of Canadian goods.

Carney cast doubt on the U.S.’s reliability as a partner, saying Canada was finding reliable partners “everywhere in the world, except in the United States. Except in the United States. And Russia.”

Trump unleashes personal attacks on Canadian leaders

On Monday, Trump came back with further tariffs, warning that he would impose them on Canada’s auto industry beginning next year.

“Canada has been ripping off the United States of America for years,” Trump wrote on social media, criticizing what he called the country’s “ridiculously high tariffs” on American farmers.

Carney said Washington’s auto-sector proposals would gradually have the effect of dismantling Canadian production.

“This is the most successful automotive partnership in history,” Carney said, referring to the deeply integrated Canada-U.S. industry.

Meanwhile, Ontario Premier Doug Ford unleashed his own tirade. In an interview with The Associated Press, he said Trump had underestimated Canadians’ willingness to endure economic pain rather than give in to U.S. pressure.

“We’re all in,” Ford said. “Up here, we’re at a fever pitch; everyone’s in for an economic war. They know they’re going to have to sacrifice.”

Trump responded in a social media post by attacking Ford personally, calling him “the less charismatic, intelligent, and overall unimpressive brother of the late, great, Rob Ford,” and once again referring to Canada’s prime minister as “Governor Carney.”

Ford dismissed the insults: “If you think an insult from him hurts me? Well, bring it on, buddy, I’m ready.”

Ford is a Progressive Conservative whose party differs from that of Carney, a Liberal, but the two underscore broad political unity in Canada over the trade fight with Trump.

Ford threatens critical minerals and electricity

Ford said “everything is on the table” if the dispute worsens, including cutting off electricity and critical minerals from Ontario.

Critical minerals are increasingly important to U.S. national security and manufacturing. The Pentagon has sought more secure supplies of minerals used in military aircraft, missiles, munitions and electronics as Washington tries to reduce reliance on China, which dominates the mining or processing of several strategically important minerals.

Ford said Canada should also consider increasingly severe retaliation if Trump continues targeting Canadian industries, including oil and potash, while Ontario could raise electricity prices or stop sending power south.

“We power 1.5 million homes and businesses,” Ford said. “Everything’s on the table. I’ll do whatever it takes.”

Ford has used electricity as leverage before. During an earlier phase of the dispute, Ontario imposed a 25% surcharge on electricity exported to Michigan, Minnesota and New York. Trump responded by threatening to double tariffs on Canadian steel and aluminum before both sides backed away.

Auto industry becomes a central battleground

Ford accused Trump of not simply seeking a better trade deal but aiming to hollow out Canadian industries and move production south.

Ford said Trump wants to make Canada a vassal state.

“He wants to bleed out every single sector and bring them down to the U.S.,” Ford said.

The auto sector is especially important to Ontario, the center of Canada’s vehicle manufacturing industry. Plants and suppliers in Ontario are tightly integrated with factories in Michigan and other U.S. states, with parts routinely crossing the border multiple times during production.

Automakers including Ford, General Motors and Stellantis operate major assembly plants in Ontario, and the wider supply chain supports tens of thousands of jobs. Trump’s new threat of a 50% tariff on Canadian vehicles and parts puts that sector directly at the center of the escalating dispute.

U.S. Trade Representative Jamieson Greer said Monday that “the only reason Canada has auto production in the first place” was because of the 1960s Auto Pact, under which Canada used access to its market to encourage vehicle production north of the border.

Ford says he opposed preliminary deal

Ford also disclosed that he had opposed the preliminary agreement Carney was considering before Canada walked away from negotiations, and that he was unwilling to restore American liquor to Ontario store shelves as part of an agreement.

“I wasn’t going to put the booze back on the shelves,” Ford said. “I was ready to go out there and call a press conference … and say I’m not buckling over.”

Ford said he understood Washington had sought language late in the negotiations that would have restricted Canada’s ability to negotiate trade agreements with other countries without U.S. approval. Carney has called that demand unacceptable and a question of Canadian sovereignty.

Carney said the dispute also exposed a deeper divide over language and culture, saying protections for French and Canadian culture that Washington views as trade irritants are considered fundamental rights in Canada.

“Who does he think he is?” Ford said of Trump. “You gotta be kidding.”