President Donald Trump threatened new 50% tariffs on cars, trucks, automobile parts and steel imported from Canada in a Truth Social post Monday, after Canadian Prime Minister Mark Carney announced he would retaliate against any new U.S. tariffs.
Trump threatened to start the tariffs on Jan. 1, 2027, saying “Canada has been ripping off the United States of America for years.”
“Canada will be treated like a State no longer,” he wrote. “On Trade, and in other ways, also, they are among the worst Nations in the World to deal with.”
When looking at auto markets in the U.S. and Canada, the U.S. is larger and produces more. According to TD Economics, Canada produces 14 car models but consumes 325. Meanwhile, the U.S. produces 121 of the 328 models Americans consume.
CNBC reports that just 5.4% of vehicles produced in Canada were sold in the U.S. last year.
Other tariffs took effect this weekend
The additional tariff threat comes on the heels of newly imposed 50% tariffs that took effect this weekend. Those tariffs impacted roughly $20 billion in Canadian imports — everything from hockey sticks to building materials.
In response, Canada announced plans to retaliate on Sept. 8 with tariffs targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
A deal falls apart
The tariffs and threats came just days after Trump suggested an agreement was essentially finished.
Trump wrote Tuesday that the two countries “have a DEAL” and gave negotiators three additional days to complete the terms.
By Friday night, the talks had collapsed.
Carney called the new tariffs “a miscalculation” and said Washington had “asked too much and offered too little.”
Carney said some of the final U.S. demands involved Canadian-made trucks and limits on Canada’s ability to negotiate trade agreements with other countries. He also described the proposed terms as “uneconomic” and “unfair.”
U.S. Trade Representative Jamieson Greer blamed Ottawa for the collapse, saying Canada changed its position after the two sides had agreed to terms earlier in the week.
The Washington Post reported that an official with the Office of the U.S. Trade Representative disputed Carney’s claim that Washington sought to restrict Canada’s ability to make trade deals with other countries. The official said Washington’s concern centered on steel and aluminum entering Canada through agreements with other countries, not on preventing Canada from signing those deals.
Canada prepares for a longer fight
There may be no quick return to the negotiating table. Bloomberg reports that Carney’s government sees little chance of talks resuming before the November midterm elections and is preparing financial support for Canadian businesses in case the dispute lasts much longer.
Carney said his government would support affected businesses “for as long as it takes,” including beyond the current U.S. administration if necessary. U.S. officials have also said no new trade talks with Canada are currently planned.
Businesses brace for higher costs
The tariffs were imposed under Section 338 of the Tariff Act of 1930, a provision that had never previously been used. Legal challenges are expected.
The U.S. Chamber of Commerce warned the tariffs could leave Americans paying more while creating additional problems for cross-border supply chains.
The Canadian Chamber of Commerce also warned that the dispute could hurt consumers and businesses on both sides of the border.
Annual trade between the U.S. and Canada exceeds $700 billion.
Round out your reading
- Former Fetterman staffers create social media account to expose former boss.
- Why Gen Z finally wants Boomer hand-me-downs.
- Want a copy of Pete Hegseth’s driver’s license? It’s for sale on the dark web.
- Smart glasses helped a man see the world. The privacy panic took it away.
- Americans are keeping cars longer, so the auto industry is making it easier to pay for repairs.
