Canada's Prime Minister-designate Mark Carney has said he is ready to negotiate a renewed trade deal with President Donald Trump, as long as there is "respect for Canadian sovereignty".

Carney made these comments during a visit to a steel plant in Hamilton, Ontario, as Canada unveiled C$29.8 billion ($20.7 billion) in reciprocal tariffs on US imports.

It comes after Trump slapped 25% tariffs on all steel and aluminium coming into the country.

Since President Trump took office in January, the two countries have been involved in an escalating trade war, with the US president repeatedly threatening to annex its neighbour.

Carney on Wednesday condemned the latest round of US tariffs as "unjustified".

"We're all going to be better off when the greatest economic and security partnership in the world is renewed, relaunched," he said.

Canada, which is the biggest foreign supplier of steel and aluminium to the US, is heavily exposed to the tariffs.

Trump has justified the tariffs, claiming they are necessary for US national security and to boost demand for domestic producers, which he argues has been "depressed" by foreign competition.

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The US president implemented a blanket 25% tariff on goods from Canada and Mexico, citing concerns over drugs and migrants crossing the US border.

The tariffs on steel and aluminium, effective Wednesday, mark the end of exemptions previously granted to several countries, including Canada.

In retaliation, Canada announced tariffs on US goods, including steel and aluminium, with additional measures set to take effect at 00:01 EST (04:01 GMT) on Thursday.

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

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

On Wednesday, Canada's central bank cut interest rates to 2.75% from 3% to prepare the country's economy for disruption.

Canadian Finance Minister Dominic Leblanc told a news conference that the country was still seeking to de-escalate.

"If you're racing to the basement, there's no real prize for the first person to get to the basement," Leblanc said.

On Thursday, Ontario Premier Doug Ford, along with federal representatives, will meet US Commerce Secretary Howard Lutnick.

Lutnick told Fox Business Network that at the meeting he plans to try to "level set" things between the two nations.

Mark Carney, who was elected leader of the governing Liberal Party on Sunday, is set to be sworn in as prime minister, replacing Justin Trudeau. He has promised to win the trade war against Trump, following his landslide victory.