US President Donald Trump has threatened to impose a 50 per cent tariff on vehicles imported from Canada from January 1, 2027, escalating tensions between the two North American trading partners.
Trump made the threat on Monday after trade negotiations between the United States and Canada broke down last Friday.
The proposed tariff would affect Canadian-made cars, trucks and automotive parts, as well as steel used in the sector.
In a post on Truth Social, Trump accused Canada of taking advantage of the United States for years and warned that tariffs on foreign-content vehicles would be increased.
The latest threat comes after the United States imposed new 50 per cent duties on selected Canadian goods over the weekend following the collapse of the talks.
Canadian Prime Minister Mark Carney responded by announcing retaliatory tariffs on US steel, dairy products, agricultural equipment, pulp, paper and electronics. The measures are expected to take effect on September 8.
Carney said the negotiations collapsed after US officials made last-minute demands for restrictions on Canada’s trade agreements with other countries, as well as what he described as unacceptable demands involving Quebec culture and the French language.
Canada sends about 70 per cent of its exports to the United States, making the country highly exposed to any prolonged trade dispute between both countries.
However, Carney said his government would focus on strengthening domestic economic growth and diversifying Canada’s international trade rather than accepting an agreement it considers unfavourable.
The proposed vehicle tariff could further disrupt the highly integrated North American automobile industry, where parts and vehicles frequently cross the US-Canada border during production.
