US President Donald Trump has announced plans to increase tariffs on Canadian cars, trucks, automotive parts and steel to 50 per cent from January 1, 2027, escalating an already deepening trade dispute between the United States and Canada.
Trump made the announcement on Monday in a post on his Truth Social platform, saying the new tariffs would apply to both large and small vehicles as well as automotive parts and steel.
The current US tariff on Canadian autos stands at 25 per cent for non-US content, while imported steel generally attracts a 50 per cent duty.
The latest threat came after Washington and Ottawa failed to reach an agreement on Friday to avert new US tariffs on selected Canadian goods. The new 50 per cent duties took effect on Saturday.
Canadian Prime Minister Mark Carney subsequently announced retaliatory measures against US products after rejecting what he described as a “bad deal”.
The Canadian tariffs, which are expected to take effect on September 8, will target US steel and dairy products, as well as agricultural equipment, pulp and paper and electronics.
The White House has accused Canada of “discriminatory treatment” of US alcohol, automobile and dairy products in imposing its own trade measures.
Trump had delayed the implementation of the latest US tariffs by three days last week as officials from both countries intensified negotiations.
Canada’s chief negotiator, Dominic LeBlanc, and his team held lengthy discussions with US Trade Representative Jamieson Greer in Washington on Thursday and Friday. However, the talks ended without an agreement after negotiations continued late into Friday night.
The latest US duties affect about 5.5 per cent of Canadian goods entering the country, representing approximately $20 billion worth of products, including hockey sticks and cement.
Trump, who has repeatedly criticised Canada’s trade policies, said on Monday that “Canada has been ripping off the United States of America for years”, adding that “we don’t need Canada, they need us.”
Greer told The New York Times on Saturday that the Trump administration had offered to remove a 10 per cent tariff on Canadian softwood lumber and reduce the 25 per cent tariff on automobiles.
He also said Washington was prepared to lower steel tariffs from 50 per cent to 25 per cent for most Canadian steel.
However, Carney announced late Friday that Canada would suspend trade negotiations with the US, while Greer confirmed on CBS on Monday that no further talks had yet been scheduled.
The escalating dispute comes as both countries also face negotiations over revisions to the US-Mexico-Canada Agreement, with Trump declining to renew the existing arrangement in its current form.
Trump’s repeated threats to make Canada the 51st US state have further strained relations and angered many Canadians.