Canada plays tariff tit-for-tat with Trump

US President Donald Trump has threatened to impose 50% tariffs on Canadian cars, trucks, automotive parts, and steel starting January 1, 2027, following the failure of trade talks between the two nations. The escalation in the trade dispute comes after the US imposed a 50% tariff on a range of Canadian products on August 22, sparking Canada's promise of dollar-for-dollar countermeasures commencing on September 8.

Trump's announcement, made on August 24 through a social media post, comes as a reflection of deteriorating trade relations between the neighboring countries that share deeply integrated supply chains. The Trump administration has previously criticized Canada for retaliating against US tariffs, with the US administration considering Canada as one of the few countries, apart from China, to do so.

Auto parts will be hit by the new duties as Canada currently faces a 25% tariff on vehicles, but not parts, unless the non-US content value exceeds a certain threshold.