Trump Threatens 50% Tariffs On Canadian Cars, Trucks From 2027

US President Donald Trump has threatened to raise tariffs on all cars, trucks and automotive parts imported from Canada to 50 per cent from January 1, 2027, escalating an already bitter trade dispute between the two North American neighbours.

Trump issued the threat after trade negotiations between the United States and Canada collapsed last week.

A proposed trade agreement would have reduced the US tariff on Canadian cars and light-duty trucks from 25 per cent to 15 per cent, while tariffs on Canadian aluminium and steel would have fallen from 50 per cent to 25 per cent.

However, the negotiations broke down on Friday following disagreements, including whether tariff relief would extend to medium- and heavy-duty trucks.

The threatened increase could disrupt one of the world’s most integrated automotive supply chains, with US vehicle manufacturers relying heavily on Canadian-made parts and vehicles.

Higher tariffs could increase production costs for American automakers and consumers, while further affecting auto stocks amid the escalating trade tensions.

Trump, in a social media post, said, “Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer!”

He added, “On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, we don’t Canada, They Need Us!”

US Treasury Secretary Scott Bessent told reporters on Monday that Trump wants Canada to return to the negotiating table and engage in good faith.

Canadian Prime Minister Mark Carney, speaking at a press conference in Quebec on Monday, said a “mutually beneficial deal” with the US remained possible, but stressed that Washington must respect Canada’s sovereignty.

“When the Americans go to the negotiating table first with the right attitude toward our industry and a true partnership, of course we’ll come to the negotiating table,” Carney said.

The Canadian prime minister spoke while announcing an investment in six new Canadian icebreaker ships.

Canada has consistently ranked among the United States’ two largest trading partners. In 2025, trade in goods and services between the two countries totalled $872.3 billion, representing a 4.6 per cent decline from the previous year.

According to the US Trade Representative’s Office, Canada exported about three-quarters of its goods to the United States and imported almost half of its goods from its southern neighbour.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, warned that US manufacturers would ultimately bear the cost of tariffs on Canadian auto parts.

“A threatened U.S. tariff on Canadian auto parts will be paid by (the) US auto assembly. Without those specific parts, auto assembly throughout the U.S. would halt,” Volpe said.

The White House had not immediately responded to requests for further details on the proposed tariffs.

Canada, meanwhile, is set to impose tariffs on some US goods from September 8 in retaliation for the 50 per cent levies ordered by Trump on $20 billion worth of Canadian products.

Asked on Saturday whether Canada was engaged in a trade war with the United States, Carney said, “You’re at war when you get attacked. We got attacked.”

The dispute has also drawn strong public support for Carney’s decision to end the trade negotiations. An Angus Reid Institute poll released on Sunday found that three in four Canadians approved of the move.

The White House said the trade standoff had contributed to a 22 per cent reduction in Canadian imports of US vehicles. Several major automakers have also announced or are considering plans to scale back production in Canada.