U.S. President Donald Trump speaks to reporters before boarding Air Force One at Joint Base Andrews, Maryland, Aug. 21, 2026.
Saul Loeb | AFP | Getty Images
President Donald Trump announced Monday that the United States will raise import tariffs on cars, trucks and auto parts from Canada to 50% on January 1, 2027, following the breakdown in trade negotiations last week.
“Canada has been robbing America for years,” Trump wrote in a post on Truth Social, accusing the longtime trading partner of harming American farmers through its own tariff policies.
“It’s not sustainable and it’s no longer sustainable!” he wrote. “On January 1, 2027, tariffs on all passenger cars, large and small, automobile parts, and steel will be raised to 50%.”
President Trump’s latest tariff threat would double the maximum U.S. tariff on Canadian car imports, which currently stands at 25%. Canada’s bid to lower those tariffs as part of a new trade deal with the United States, which appeared to be inches away from completion, collapsed on Friday night.
U.S. tariffs on Canadian steel imports have already reached 50%.
The United States on Saturday imposed 50% tariffs on about $20 billion worth of Canadian goods, including wine, cement, hockey sticks and other products. These obligations were imposed in retaliation for allegations of Canadian trade discrimination against U.S. automobiles, alcohol, and dairy products.
That situation would have been avoided if the two countries had reached a trade deal, but Canadian negotiators left Washington empty-handed Friday night. Both parties have accused each other of trying to make last-minute changes to the agreement.
“I think there was more that Canadians wanted in the last few hours,” U.S. Trade Representative Jamison Greer told CNBC’s “Squawk Box” Monday morning.
Canadian Prime Minister Mark Carney has vowed to retaliate against new U.S. tariffs with “dollar for dollar.”
In a post on Truth Social on Monday, President Trump declared that Canada “will no longer be treated like a nation!”
He also attacked Canada as “one of the worst countries in the world” when it comes to trade and other matters.
“They feel entitled, but still, we don’t need Canada, they need us! They do 95% of their business with the US, the complete opposite of us!” Trump wrote.
Canada’s car market is small compared to the US: Less than 2 million new cars were sold in Canada in 2025, compared to more than 16 million in the US.
According to GlobalData, only 5.4%, or about 861,000 vehicles, were made in Canada and sold in the U.S. last year.
When it comes to car production in Canada, Detroit automakers have scaled back, while Japanese automakers Toyota and Honda have significantly increased production in recent years.
Toyota and Honda accounted for 76.5 per cent of Canadian auto production in 2025, and Toyota and Honda each produced more cars in Canada than Ford, General Motors and Stellantis combined, according to a major trade association representing automakers outside of Detroit.
President Trump’s mercury tariff policy is a source of great uncertainty for automakers whose supply chains are built on free trade between the two countries. Auto parts can cross multiple borders and be subject to multiple customs duties before they end up in new cars.
