US President Donald Trump pledged to double the automobile tariff on Canadian vehicles and parts starting next year, escalating the spiraling trade fight between the two economies.
Trump posted on Monday that “Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel” would rise to 50 percent, effective Jan 1. The current auto rate is 25 percent but is applied only to non-US content. Imported steel already faces a 50 percent charge.
The latest tariff threat comes after negotiations between the US and Canada broke down Friday, which led to a 50 percent levy on billions of dollars worth of Canadian goods to take effect. Canadian Prime Minister Mark Carney has announced a package of retaliatory duties.
Following through on the auto tariffs could significantly disrupt a supply chain between the US and Canada that has become deeply integrated over the past few decades. Trump has previously pledged to tariff auto parts but had not yet proceeded with the logistically complicated task.
It was not immediately clear how Trump would address the carve-out for US content in vehicles, which substantially affects the tariff rate. Levies on Canadian vehicles, in practice, are about half the headline rate because the vehicles are typically half US-made.
It is also unclear if the new tariffs Trump announced Monday will ever be enacted. The Jan 1 implementation sets up runway for potential negotiations, even as the Canadians see little chance of those resuming before the midterm elections in November. Carney is set to respond to the weekend tariffs with levies of his own on Sept 8 and the US has threatened to escalate further if he does.
Even as Trump ratcheted up his tariff threats, other administration officials signaled they were open to resuming discussions with Canada.
“I think he would like Canada to come to the table and negotiate in good faith,” US Treasury Secretary Scott Bessent told reporters Monday.
Vice President JD Vance, speaking at an event in Maine, said negotiations were “still ongoing,” but provided no details on any formal talks.
The escalating trade fight between the US and Canada poses yet another challenge for Trump ahead of the looming midterm elections that will hinge on voter perceptions of his economic agenda. The clash with Canada threatens to worsen voters’ worries about high costs of living and complicate the administration’s bid to lower borrowing costs.
Monday’s threat was Trump’s most fulsome response yet since the sudden collapse of trade talks killed an emerging deal to head off the new levies and adjust existing ones. The two sides have blamed each other for the collapse of negotiations.
US Trade Representative Jamieson Greer said the deal offered Canada tariff reductions, including for steel, aluminum and autos, while Carney said he walked away because of 11th-hour US demands that were too great.
The new measures Trump announced Monday target the Canadian province of Ontario in particular. The province is led by Premier Doug Ford, whose pugnacious approach to talks has riled the Trump administration.
Steel and auto production is heavily concentrated in Ontario, which is Canada’s most populous and vote-rich province. Ford has also talked about retaliation against the US, including floating cutting off electricity exports.
Trump mocked Ford in a social media post Monday, dismissing the premier’s stance as “bluster.”
“Someone should get these clowns to ‘fall in line’ or, the consequences for Canada will be far WORSE!” he wrote.
