Trump slams Canada with new 50 percent auto tariffs for 2027

United States President Donald Trump has said he will double tariffs on Canadian cars and trucks and will introduce tariffs on auto parts in 2027, in the latest attempt to pressure Ottawa after tariff negotiations collapsed last week.

On Monday, Trump said tariffs on Canadian auto and steel will be doubled to 50 percent from January 1. These are in addition to the 50 percent tariffs imposed on Saturday after trade negotiations between the two countries collapsed.

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As the tariff on steel is already at 50 percent, it’s not clear what Trump meant. He also introduced 50 percent tariffs on auto parts, which thus far had not faced a levy.

“Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer!” Trump wrote on his social media platform, Truth Social.

“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!”

Trump wants Canada to come to the table and negotiate in good faith, US Treasury Secretary Scott Bessent told reporters on Monday.

At a press conference in Quebec on Monday, Canadian Prime Minister Mark Carney said a “mutually beneficial deal” with the US was possible, but only if Americans respect Canada’s sovereignty.

“When the Americans go to the negotiating table first with the right attitude toward our industry and a true partnership, of course we’ll come to the negotiating table,” Carney said at a briefing announcing an investment in six new Canadian icebreaker ships.

Ford vs Trump

Doug Ford, the premier of Ontario, the province that is home to auto manufacturing, told the Associated Press, that Trump had “declared war, economic war against his closest friend and ally” before invoking Ronald Reagan, whose opposition to tariffs Ford previously featured in a television advertising campaign aimed at US consumers.

Ford noted that Trump keeps a portrait of the late president near his desk.

“He’d be throwing up on him from the picture if he knew what was going on, spinning around in his grave right now,” Ford said. “He should maybe take that picture off the wall and move it somewhere else. Because right now, Ronald Reagan would be disgusted with President Trump.”

He warned that if the dispute worsens, “everything is on the table”, including cutting off electricity and critical minerals from Ontario. He also called for Canada to consider using oil and potash as leverage.

“I’ll cut them off,” Ford said of critical minerals. “You won’t get a grain of sand out of Ontario.”

“We power 1.5 million homes and businesses [in the US],” Ford said. “Everything’s on the table. I’ll do whatever it takes.”

If Trump continues trying to dismantle Canadian manufacturing, Ford said, “he better have a pack of batteries”.

Trump retaliated on TruthSocial, saying, there was “lots of bluster from Doug Ford” and that Canada should remember, “much of the Electricity, Oil, and Gas that Canada gets is transported through the U.S.A. Someone should get these clowns to “fall in line” or, the consequences for Canada will be far WORSE!”

Integrated economies

Canada has consistently been one of the top two trading partners of the US. Last year, the country’s goods and services trade with Canada totaled $872.3bn, down 4.6 percent.

Canada exported over three-quarters of its goods to the United States and imported almost half of its goods from the country.

US auto production is heavily integrated with Canada and Mexico and the tariffs could have drastic impacts on American production.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said, “A threatened US tariff on Canadian auto parts will be paid by [the] US auto assembly. Without those specific parts, auto assembly throughout the US would halt.”

The White House did not immediately respond to a request for comment seeking more details on the threatened tariffs. Representatives for the Canadian government also did not immediately respond to a request for comment.

The two countries failed to reach a trade deal late on Friday, with each side blaming the other. Canada readied tariffs on some US goods in retaliation for 50 percent levies ordered by Trump on other Canadian products.

Canada has said it will impose tariffs on some US goods starting September 8 in retaliation for 50 percent levies ordered by Trump on $20bn in Canadian products.

“You’re at war when you get attacked. We got attacked,” Carney said on Saturday when asked whether Canada was engaged in a trade war.

Three in four Canadians approved of Carney’s decision to walk away from trade negotiations with the US late on Friday night, according to an opinion poll by the Angus Reid Institute on Sunday.

Shares of auto stocks were down. Shares of Ford and Stellantis were down 3.2 percent and 4.7 percent, respectively, while shares of General Motors were down 1.1 percent on Monday afternoon. Toyota stock was down 1.5 percent in New York trading and Honda shares were down 2.1 percent.