Trump threatens to double Canadian car tariffs

On Monday, US President Donald Trump announced his intention to double US tariffs on vehicles, trucks, and automotive components imported from Canada to a potential 50 per cent starting January 1, escalating a trade dispute after negotiations collapsed the previous week. The proposed deal would have reduced the top tariff rate on Canadian cars and smaller trucks from 25 per cent to 15 per cent, as well as cut aluminium and steel tariffs from 50 per cent to 25 per cent.

However, the agreement fell through due to disagreements over the applicability of US tariff relief to medium and heavy-duty trucks. This move threatens to disrupt a highly interconnected automotive supply chain, as US vehicle production heavily relies on parts manufactured in Canada. In a social media post, Trump declared, "Build in the US and there are zero tariffs.

Canada will be treated like a state no longer." He further criticized Canada's attitude toward trade, stating, "They feel entitled, and yet, we don't need Canada, they need us." Canadian Prime Minister Mark Carney expressed limited optimism about resuming negotiations before the November midterm elections, stating, "A mutually beneficial deal with the US is possible, but only if the Americans respect Canada's sovereignty."

In response, Canada announced levies on September 8, and US stock markets saw a decline in automotive shares, with Ford, Stellantis, General Motors, Toyota, and Honda experiencing declines of 3.6 per cent, 4.2 per cent, 1.6 per cent, 1.5 per cent, and 2.1 per cent, respectively.