WASHINGTON: US President Donald Trump said Monday he would impose a 50% tariff on Canadian automobiles, auto parts and steel from January 1, 2027, escalating a trade dispute with one of Washington’s biggest trading partners.
The announcement came days after trade talks between the United States and Canada collapsed, with Canadian Prime Minister Mark Carney accusing Washington of making disproportionate demands at the last minute.
The latest threat adds to existing US tariffs on Canadian goods and could deepen economic tensions between the two neighbours.
The current US tariff on Canadian automobiles stands at 25%.
“Build in the US and there are ZERO TARIFFS. Canada will be treated like a [US] State no longer!” Trump wrote on social media.
“On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!” he added.
— Rapid Response 47 (@RapidResponse47) August 24, 2026
US-Canada trade talks collapse
The two countries have blamed each other for the failure to reach a trade agreement late on Friday.
The breakdown came as the countries sought to avert US tariffs of 50% on a range of Canadian products, including hockey sticks, fishing rods, wine and dairy goods.
Those tariffs took effect on Saturday and cover about $20 billion (€17 billion) worth of Canadian exports to the United States, according to the information provided.
Also Read: US and Canada Fall Deeper into Trade War with New Tariffs as Talks Collapse
The affected goods account for roughly 5% of Canada’s annual exports to the United States.
Canadian negotiators walked away from talks in Washington after the two sides failed to bridge their differences.
Carney accused the Trump administration of using economic integration as a weapon and said Canada had been “attacked” by the new US tariffs. “They asked too much and offered too little,” Carney said.
No further negotiations are currently scheduled.
Canadian PM plans retaliatory tariffs
Carney said Canada would impose retaliatory tariffs from September 8 on a range of US products.
The measures will cover steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics, he said.
Canada’s planned response threatens to widen the dispute and put further pressure on businesses and consumers in both countries.
Also Read: Canada Hits Back with New Tariffs After Trade Talks with US Fail
The United States accounts for roughly 70% of Canada’s exports, leaving Ottawa heavily exposed to prolonged trade restrictions.
The current dispute also threatens industries with deeply integrated supply chains, particularly the automobile and steel sectors.
The escalation comes as both countries face the prospect of higher costs and disruption to cross-border trade.
The United States is already imposing a 50% tariff on about $20 billion worth of Canadian goods, while Canada’s retaliatory measures are due to begin in early September.
Trump’s proposed tariffs on Canadian vehicles, auto parts and steel from January 2027 would further increase pressure on Canada’s export-dependent economy.
