Trump threatens to double tariffs on Canadian autos to 50% in January

President Donald Trump announced Monday that the United States will raise tariffs on all Canadian cars, trucks, automotive parts, and steel to 50% beginning Jan. 1, 2027, sharply escalating a trade war with Ottawa days after bilateral negotiations collapsed.

"On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%," Trump wrote in a Truth Social post, accusing Canada of "ripping off the United States of America for years." The move would double the current 25% tariff on Canadian vehicles, which is applied only to non-U.S. content, while imported steel already faces a 50% duty.cbsnews+2

Negotiations Collapse

The tariff threat follows the breakdown of weeks-long trade talks between Washington and Ottawa. Canadian Prime Minister Mark Carney pulled his negotiators out late Friday, saying the U.S. had proposed "new terms that were uneconomic" and "unfair." U.S. Trade Representative Jamieson Greer offered a different account on CNBC Monday, saying the two sides had been close to a deal by Tuesday night before Canada introduced expanded demands, including coverage of heavy trucks alongside passenger vehicles.qz+2

The collapse triggered separate 50% tariffs on roughly $20 billion in Canadian imports — covering goods from hockey sticks to dairy products — that took effect Saturday under Section 338 of the Tariff Act of 1930, a provision that had not been used since 1949.ibtimes+1

Retaliation and Industry Fallout

Carney vowed Saturday that Canada would match U.S. tariffs "dollar for dollar" beginning Sept. 8, targeting sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Ontario Premier Doug Ford went further Monday, telling the Associated Press that Canada should be prepared to cut off electricity and critical-mineral exports to the United States if the dispute worsens. "You won't get a grain of sand out of Ontario," Ford said.nbcnews+2

A 50% tariff on Canadian-made vehicles could disrupt deeply integrated North American supply chains. Plants in Canada produce vehicles for General Motors ↘ 1.08%, Ford ↘ 3.33%, Toyota, and Honda ↘ 2.34%, with parts crossing the border multiple times before a finished car reaches a dealership. Dan Kelly, president of the Canadian Federation of Independent Business, warned that "the impact on small businesses will be immediate and significant."eurasiabusinessnews+1

The Jan. 1 deadline leaves both sides roughly four months to resume talks, but Greer offered no timetable for restarting negotiations, saying only that Washington remained open if Ottawa returned without seeking additional concessions.tradingview