// BBC WORLD NEWS — MONDO
Carney faces crucial test after walking away from Trump's deal
The United States and Canada have entered into uncharted territory.
The longtime allies and economic partners, who have enjoyed free trade for decades, are now in an escalating trade war with no clear off ramp.
And for Prime Minister Mark Carney, the late night decision to suspend talks with President Donald Trump and to retaliate instead of agreeing to a deal that seemed in reach, will be a significant political test.
He is one of the first world leaders to walk away from the negotiating table with the White House - and the outcome will be closely watched.
Both sides have have blamed last-minute changes for torpedoing the tentative deal.
Carney's decision will also challenge the appetite among Canadians to accept some economic pain as Ottawa pushes for more US concessions.
After rejecting Trump's high pressure tactics, and in choosing to hit back against the latest duties, Carney will need to convince Canadians that the economic pain is worth the cost of standing up to the Trump administration in search of a better agreement in the long run.
There is no doubt this will cause pain on both sides of the border, with business facing more pressure from US duties and Canadian counter-tariffs.
Canada sends about 70% of its exports to the US, and the country is the top trading partner for a number of US states, with Michigan, Kentucky, Indiana and Ohio among the most exposed.
Carney came to power with a call for "elbows up" - an ice-hockey term for an aggressive approach - vowing to fight for Canada in the face of a Trump administration keen to exert economic pressure for its America First agenda.