President Donald Trump said Monday that the U.S. will increase tariffs on Canadian imports of cars, trucks, and auto parts to 50% starting January 1, 2027, after trade negotiations between the two countries broke down last week.
In a Truth Social post, Trump accused Canada of taking advantage of the U.S. for years and claimed its tariff policies have harmed American farmers. He said the current situation is no longer sustainable and announced that tariffs on vehicles of all sizes, automotive parts, and steel would rise to 50% beginning in 2027.
“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%,” he added.
Trump’s latest tariff proposal would double existing U.S. duties on Canadian auto imports, raising them from 25% to 50%. Canada had been seeking to reduce those duties as part of a new trade agreement with the U.S., but the deal collapsed just before completion on Friday.
U.S. tariffs on Canadian steel are already set at 50%. On Saturday, Washington also imposed 50% tariffs on roughly $20 billion worth of Canadian products, including wine, cement, hockey sticks, and other goods. The measures were introduced in response to what the U.S. described as discriminatory Canadian trade policies affecting American cars, alcohol, and dairy products.
The additional tariffs could have been avoided if the two countries had finalized a trade agreement. However, Canadian negotiators left Washington without a deal Friday, with both sides accusing the other of introducing unreasonable changes at the last minute.
Canadian Prime Minister Mark Carney has pledged to respond with retaliatory measures.
Canada’s auto market is considerably smaller than that of the U.S., with fewer than 2 million new vehicles sold in 2025 compared with more than 16 million in the American market.
According to GlobalData, only about 861,000 vehicles, 5.4% of Canada’s total production, were exported to the U.S. last year. Detroit automakers have steadily reduced their Canadian output, while Toyota and Honda have expanded significantly. Together, the two Japanese manufacturers accounted for 76.5% of Canada’s vehicle production in 2025, each producing more cars in Canada than Ford, General Motors, and Stellantis combined, according to a major trade group representing non‑Detroit automakers.
Trump’s unpredictable tariff policies have created major uncertainty for automakers, whose supply chains rely on cross‑border free trade.
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