Donald Trump just made a move that could reshape North America’s auto industry overnight. The president issued a stark new tariff threat against Canada as trade talks between the two neighbors hit a breaking point.
Donald Trump’s latest moves raise tensions between the US and Canada
President Donald Trump threatened Monday to impose a 50% tariff on Canadian automobiles, car parts and steel starting next year, as PBS News and BBC reported. Trade talks between the two allies collapsed last week over disputed last-minute demands. Long-planned US tariffs on various Canadian goods went into effect after negotiations broke off.
Trump posted on Truth Social, “Canada has been ripping off the United States of America for years.” He also criticized Canada’s tariffs on American farmers, writing, “Not sustainable, and NOT ANYMORE!” The president accused Ontario Premier Doug Ford of “bluster” after Ford pushed back publicly.
Canadian Prime Minister Mark Carney called Trump’s tariff threat unsurprising. He accused the president of wanting to destroy Canada’s auto industry. Carney stated Canada would counter with reciprocal tariffs on US goods “dollar for dollar.”
Canadian officials said the US introduced last-minute demands that were “unacceptable.” These included a clause limiting which countries Canada could sign trade deals with. US Trade Representative Jamieson Greer countered in a CNBC interview, saying, “They wanted more.”
Ford suggested Canada should charge the US extra for oil, gas and electricity. He also proposed leveraging critical minerals as a countermeasure against tariffs. Canada supplies 60% of total US crude oil imports, according to Canadian government data.
Businesses on both sides warned they stand to suffer from escalating tariffs. Oxford Economics experts cautioned that the USMCA trade pact risks unravelling amid these tensions. Such a collapse “would plunge Canada into recession and leave it on a permanently lower growth path.” Carney meanwhile announced C$11bn in funding to build six icebreakers at a Quebec shipyard. The vessels will open winter shipping routes through Canada’s northern and Atlantic waters.
Originally reported by Vritti Johar on Mandatory.com.
