Former Canadian Finance Minister Chrystia Freeland speaks at the Peterson Institute for International Economics in Washington on April 12, 2023. Kevin Dietsch/Getty Images hide caption

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Kevin Dietsch/Getty Images

Canada's latest tariffs on American goods took effect Tuesday. It's another escalation in a trade war that is raising costs and testing a relationship that, until recently, was among the closest in the world.

Prime Minister Mark Carney's government imposed tariffs of up to 50% on about $20 billion worth of U.S. goods in response to U.S. tariffs on Canadian products. The latest measures match U.S. tariffs dollar for dollar, though not product for product.

But in Canada, the fight has become about more than tariffs. Many Canadians say they feel betrayed by a longtime ally. President Trump has repeatedly suggested Canada should become the 51st state and has said he would use economic pressure, rather than military force, to make that happen. Canadians have cut back on travel to the United States and boycotted American goods as tensions have grown.

And the economic ties are hard to untangle. U.S. auto exports to Canada have fallen 22% since the trade dispute began. Canada is the largest customer for 26 U.S. states and a top-three customer for 45.

Chrystia Freeland understands the relationship from her time at the negotiating table. The former Canadian deputy prime minister and finance minister helped negotiate the U.S.-Mexico-Canada Agreement during Trump's first term. Trump once called it "the best trade deal ever."

Now, Freeland says, the U.S. risks pushing longtime allies away.

"If Americans are concerned about China in the world, which I am, the best way to act on China is with an alliance with America's traditional allies," Freeland told NPR's Morning Edition. "But it has to start with stopping punching your friends in the face, which is what Washington is doing right now."

Freeland also pushed back on the idea that Canada's much smaller economy means it ultimately has to give in.

She recalled a small meeting during an earlier round of North American trade negotiations when, she said, she was told the United States was 10 times bigger than Canada and therefore "should get our way 10 times more than you."

"That is not a way to have a partnership," Freeland said, "and Canadians simply won't stand for it."

Listen to the full interview by clicking the blue play button above. Peter Armstrong contributed reporting from Toronto.