ON Friday, the US and Canada were plunged into a trade war following the abrupt breakdown of negotiations around trade between the two countries.
At the last minute on Friday, Canadian prime minister Mark Carney pulled his negotiators out of the trade talks after months of trying to appease Trump and stave off the latest threat from the US president of a fresh tariff war against its neighbour and second largest trading partner.
Carney ordered his negotiators to walk away just before the midnight deadline, saying that the US ‘asked too much and they offered too little’, adding: ‘We were not prepared to compromise Canada’s sovereignty or undermine our key industries.’
The breaking point for Carney came with last minute changes to the ‘deal’, insisted upon by the US including, according to reports, the demand that the Trump administration has the final veto over trade negotiations between Canada and other countries.
Canadian workers had reacted with fury at what they saw as Carney’s previous efforts to submit to Trump’s demands, which they correctly interpreted as carrying forward his claim to take over Canada and turn it into the 51st state of the US.
Faced with the choice between caving into Trump’s demands, or facing a political uprising at the hands of the working class, Carney chose the option of defiance, stunning US officials and Trump who had declared days earlier that a deal was effectively done.
This triggered the move by the Trump administration to impose a 50% tariff on a range of Canadian goods with effect from Sunday.
Carney responded with a declaration that Canada is ‘at war’ with the US, telling reporters: ‘You’re at war when you’re attacked, and we got attacked’ and that he would match the new US tariffs ‘dollar for dollar’.
Carney’s words will resonate in Iran, where Trump yesterday was set to unveil his plans for the ‘toughest sanctions in history’ to make good his threats of an ‘Economic D-Day’ in a desperate attempt to crush the Iranian resistance to imperialist domination.
Having suffered a humiliating defeat militarily, the Trump administration is now reduced to carrying out economic sanctions to secure ‘victory’.
On Sunday, in the Financial Times, US treasury secretary Scott Bessent called the impending measures ‘the single greatest financial offensive ever marshalled against an adversary’.
Trump has explicitly stated his intention to penalise and sanction any foreign entities, shipping companies or global importers that facilitate the purchase of Iranian oil.
This would pit the US against China, the largest consumer of Iranian oil.
Iran’s top security official, Major General Mohsen Rezaei, responded to this latest threat when he issued a warning to America’s allies that any nation participating in or supporting the US’ economic war against the Iranian people will be viewed as committing an ‘act of war’.
Last week, Rezaei threatened that: ‘If the countries surrounding Iran join the Americans in their economic war, not a drop of oil will leave the Persian Gulf and the Strait of Hormuz, and we will also target other oil export routes from the Persian Gulf.’
Iran’s foreign minister Abbas Araghchi called the US threats ‘economic terrorism’, posting on X: ‘The so-called “Economic D-Day” is a diversion from America’s own crisis – unprecedented debt and surging interest costs.’
Trump’s tariff war against former close US allies and his attempt to defeat Iran through ‘economic terrorism’ is not just a diversion from the crisis that is engulfing US capitalism. It is an increasingly desperate attempt to survive by a US capitalist system that is drowning in debt, and determined to make the working class and the people throughout the world pay for the crisis through wars and recession.
Only the working class internationally has the power to resolve the crisis by smashing capitalism through the organisation of mass general strikes that will drive forward to seizing the power and establishing a world socialist economy.
The decisive issue today is building sections of the International Committee of the Fourth International in every country to organise the victory of the world socialist revolution. This is the way forward!
