US President Donald Trump has threatened to double tariffs on Canadian cars, trucks, auto parts and steel to 50% from January 1, 2027, deepening a trade dispute with Canada after talks between the two countries broke down last week.
In a statement on Monday, Trump accused Canada of “ripping off” the United States for years, arguing that tariffs imposed by Ottawa on American farmers and agricultural products had helped create a $60 billion trade deficit.
“Not sustainable, and not anymore!” he wrote.
Trump said tariffs on cars, trucks, automotive parts and steel would increase from 25% to 50% from January 1, 2027. He added that vehicles manufactured in the United States would face “zero tarrifs”.
The US President also took a tougher position on the broader relationship between the two countries, saying Canada would no longer be treated like a state and insisting that Washington did not depend on its northern neighbour.
“We don’t need Canada, they need us!” he said, while claiming that Canada conducts 95% of its business with the US.
The latest threat came days after trade negotiations between Washington and Ottawa collapsed, with both sides accusing each other of making unacceptable demands at the final stage of the talks.
Canadian Prime Minister Mark Carney said Trump's latest tariff warning was not unexpected, but accused the US President of seeking to damage Canada's auto industry.
Carney said Canada remained willing to resume negotiations, but only if the US returned to the table with the “right attitude”.
The talks ended on Friday, shortly before a US deadline that could have seen a 50% tariff imposed on nearly $20 billion (C$28 billion; £14 billion) worth of Canadian imports.
Canadian officials said Washington had made “unacceptable” demands at the last minute, including a proposed clause that would have limited the countries Canada could enter into trade agreements with.
US Trade Representative Jamieson Greer rejected Canada's account of the negotiations, saying Ottawa had asked for further concessions.
“They wanted more,” he told CNBC.
Carney has warned that Canada will respond to US tariffs with matching measures on American products “dollar for dollar”. He also said Ottawa would take steps to support businesses and workers affected by the new tariffs.
At the same time, Canada is looking to reduce its dependence on the US by expanding trade links and investing in infrastructure that could open up other markets.
As part of that effort, Carney announced C$11 billion ($7.95 billion; £5.83 billion) for the construction of six icebreakers for the Canadian Coast Guard at a shipyard in Quebec.
The move comes as the two countries remain closely tied through energy trade. Canadian government data shows that Canada supplies about 60% of US crude oil imports and almost all of its natural gas imports.
The latest tariff threat therefore adds fresh pressure to an already strained economic relationship, with both governments now preparing for the possibility of further trade measures from January 2027.