RESOLVING THE LEDGER
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US tariffs on all Canadian cars and trucks, automotive parts and steel will be increased to 50% starting January 1, 2027, President Donald Trump said in a social post on Monday. Doubling down on his threats, Trump said the US does not “need” Canada after trade talks between the two countries collapsed over the weekend.
Issued on: 24/08/2026 - 16:55 Modified: 24/08/2026 - 16:59
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US President Donald Trump said Monday that he would double tariffs on Canadian vehicles beginning in 2027, as the neighbouring countries spiral towards an escalating trade war .
"On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%," he wrote on his Truth Social platform.
The current US tariff on autos stands at 25% for non-US content, while imported steel to the United States generally faces a 50% duty.
Trump's latest threat comes after the North American neighbours failed Friday to reach a deal to avert new 50% tariffs imposed by the Trump administration on select Canadian goods.
The White House had alleged "discriminatory treatment" by Canada against US alcohol, automobile and dairy products in rolling out the duties.
Trump delayed their implementation by three days last week as Washington and Ottawa stepped up negotiations towards a trade pact.
However, the steep duties took effect Saturday as both sides failed to reach an agreement, and it hits about 5.5% of Canadian goods entering the United States, or some $20 billion worth of products ranging from hockey sticks to cement.
Canadian Prime Minister Mark Carney has since announced retaliatory tariffs on the United States after walking away from what he called a "bad deal."
Carney accused Washington of using “economic integration as a weapon” and said “its signature was written in pencil”. Resorting to the language of battle, he said his country had been “attacked” by the new American tariffs. “You’re at war when you get attacked,” he said, adding that Canada had the reserves, resilience and plan to respond.
But to Trump’s chief trade negotiator, Jamieson Greer, the US was compelled to act after a year of retaliation by its longtime partner.
“We’ve said enough, and so we’ve taken countermeasures. Our interest is in protecting American workers and protecting American supply chains,” the US trade representative told “Fox & Friends Weekend”.
Carney said Canada had been willing to drop remaining retaliatory tariffs on steel , aluminum and autos if the US substantially lowered its own, and to encourage provinces to restore US alcohol sales. But he said Washington’s final demands went too far. “They asked too much and offered too little,” Carney said.
Greer said the Republican administration was offering to cut tariffs on steel, autos and lumber, “things that are sensitive for them. And they’ve always had the best deal, and they still would have an even better deal, but they didn’t want that.”
As a result, he said, “We’re moving forward with measures that respond to Canadian retaliation.”
Carney said the US added last-minute terms that would have reduced tariff relief for Canadian-made vehicles, restricted Canada’s ability to strike trade deals with other countries and weakened protections for language, culture and sovereignty.
He said such demands were “unacceptable”.
The breakdown in negotiations marked a sharp reversal from two days earlier, when officials from the two countries sounded as if they were headed toward a compromise.
Ontario Premier Doug Ford, who leads Canada’s most populous province, praised Carney for rejecting the deal, saying it would have hurt Ontario’s auto, steel and manufacturing sectors. Ford urged Canada to use “every tool in our toolbox” to fight the US tariffs.
The moves also call into question the future of a North American trade agreement covering the United States, Canada and Mexico that is crucial to industry in all three countries.
Carney said the breakdown was “certainly not good news” for the review of that agreement and that the failed negotiations had given Canada “a new perspective” on what Washington wants from the broader economic relationship.
The political impact will likely be even bigger than the economic fallout. The countries sold each other $880 billion worth of goods and services last year.
The US and Canada have wrangled for decades over trade, poking each other over sore spots such as Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market.
Somehow, they still managed to remain friends, allies and trading partners. Canadian soldiers fought alongside Americans in Afghanistan after 9/11 . The 5,525-mile US-Canada border is undefended, and nearly 330,000 people and $2 billion worth of goods cross it every day; 800,000 Canadians live in the United States.
Trump’s approach to dealing with Canada marks an extraordinary departure from the traditionally cooperative relationship between the two countries. Trump has imposed tariffs on Canadian goods in a push to bring manufacturing back to the United States and made inflammatory comments about turning Canada into America’s 51st state .
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Carney said Canada had recognised that “America has changed” and that the two countries would “not return to our old relationship”.
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