Trump says U.S. will hike Canada auto tariffs to 50% as trade war escalates

President Donald Trump on Monday said the U.S. will raise tariffs on imports of cars, trucks and auto parts from Canada to 50% on Jan. 1, 2027, following a breakdown in trade negotiations last week.

"Canada has been ripping off the United States of America for years," Trump wrote in a Truth Social post, accusing the long-time trading partner of hurting U.S. farmers through its own tariff policies.

"Not sustainable, and NOT ANYMORE!" he wrote. "On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%."

Trump's latest tariff threat would double top-line U.S. duties on Canadian auto imports, which currently sit at 25%. Canada sought to lower those tariffs as part of a new trade deal with the U.S., which appeared to be inches from completion before falling apart Friday night.

U.S. tariffs on Canadian steel imports are already at 50%.

On Saturday, the U.S. imposed 50% tariffs on about $20 billion of Canadian goods, including wine, cement, hockey sticks and other products. Those duties were imposed in retaliation for alleged Canadian trade discrimination against U.S. cars, alcohol and dairy.

They would have been averted if the two sides reached a trade deal, but Canada's negotiators left Washington empty handed on Friday evening. The parties have blamed each other for trying to make unreasonable last-minute changes to their agreement.

"In the last hours, I think there were things that the Canadians just — you know, they wanted more," U.S. Trade Representative Jamieson Greer told CNBC's "Squawk Box" on Monday morning.

Canadian Prime Minister Mark Carney has vowed to retaliate "dollar for dollar" against the new U.S. tariffs.

Trump, in his Truth Social post Monday, declared that Canada "will be treated like a State no longer!"

He went on to attack Canada as being "among the worst Nations in the World to deal with" on trade and elsewhere.

"They feel entitled, and yet, WE DON'T NEED CANADA, THEY NEED US! They do 95% of their business with the U.S., with us, the exact opposite!" Trump wrote.

The Canadian auto market is small compared to the U.S.: Fewer than 2 million new vehicles were sold there in 2025, versus more than 16 million sold in the U.S.

Only 5.4%, or roughly 861,000, vehicles produced in Canada were sold last year in the U.S., according to GlobalData.

The Detroit automakers have grown smaller when it comes to vehicle production in Canada, while Japanese automakers Toyota and Honda have significantly grown production in recent years.

Toyota and Honda represented 76.5% of Canada's vehicle production in 2025, and each of Toyota and Honda produced more vehicles in Canada than Ford, General Motors, and Stellantis combined, according to a leading trade organization representing non-Detroit automakers.

Trump's mercurial tariff agenda has been a major source of uncertainty for automakers, whose supply chains were built on free trade between the countries. Automotive parts can cross borders several times in different forms before finally being installed in a new vehicle, potentially exposing them to multiple tariff charges.

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