Canadian Prime Minister Mark Carney said he was ready to reach a new trade deal with President Donald Trump as long as he “respected Canada’s sovereignty.”

Carney made these comments while visiting a steel plant in Hamilton, Ontario, where Canada announced a mutual tariff of $29.8 billion ($20.7 billion) on U.S. imports.

This comes after Trump imposed a 25% tariff on all steel and aluminum.

Since President Trump took office in January, the two countries have been involved in an escalating trade war, with the U.S. president repeatedly threatening to annex their neighbors.

Carney on Wednesday regarded the latest round of U.S. tariffs as “unreasonable.”

“When the world’s greatest economic and security partnerships are restarted, we will all be better,” he said.

Canada is the largest foreign steel and aluminum supplier in the United States.

Trump has proved the tariffs justified, claiming that it is necessary for U.S. national security and raising demand for domestic producers, which he believes is “frustrated” by foreign competition.

The U.S. president imposed a 25% blanket tariff on goods in Canada and Mexico, over concerns about drugs and immigration across the U.S. border.

The tariffs on steel and aluminum that came into effect on Wednesday mark the end of the exemptions previously granted to several countries, including Canada.

In retaliation, Canada announced tariffs on U.S. goods, including steel and aluminum, and other measures that came into effect on Thursday at EST (GMT 04:01).

The new tariffs cover a range of products, including C$12.6 billion for steel, $3 billion for aluminum, as well as tools, computer equipment, water heaters, sports equipment and cast iron products.

Experts say the growing trade dispute threatens economic stability in both countries.

On Wednesday, the Canadian central bank lowered interest rates from 3% to 2.75% in preparation for the country’s economic disruption.

Canada’s Finance Minister Dominic Leblanc said in a press conference that the country is still seeking a downgrade.

“If you’re going to the basement competition, there’s no real prize for the first person to the basement,” LeBron said.

Ontario Prime Minister Doug Ford and federal representatives will meet with U.S. Secretary of Commerce Howard Lutnick on Thursday.

Lutnick told Fox Business Network that at the conference he planned to try to “set” things between the two countries.

Mark Carney, who was elected as leader of the Liberal Party on Sunday, will be sworn in as prime minister to succeed Justin Trudeau. After his overwhelming victory, he promised to win a trade war against Trump.

Reports by Jonathan Josephs and Lisa Lambert