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Tariffs threatened for 2027
President Donald Trump threatened on Monday to raise U.S. tariffs on all cars, trucks and automotive parts from Canada to 50% starting January 1, 2027, escalating a trade fight after negotiations collapsed last week.
“to 50% starting January 1, 2027”
In a Truth Social post, Trump wrote, "On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%."
The BBC reported that the threatened increase would lift tariffs on Canadian vehicles and auto parts from 25% to 50% as of 1 January, after the breakdown of talks late last week.
The Reuters report said the escalation threatens to disrupt one of the world's most integrated auto supply chains, with higher tariffs potentially raising costs for American automakers and consumers.
Reuters also said Canada will impose tariffs on some U.S. goods starting September 8 in retaliation for 50% levies ordered by Trump on $20 billion in Canadian products.
Carney, Ford trade barbs
Prime Minister Mark Carney said a mutually beneficial deal with the U.S. was possible only if Americans respect Canada's sovereignty, telling reporters, "When the Americans go to the negotiating table first with the right attitude toward our industry and a true partnership, of course we'll come to the negotiating table,".
The AP reported that Canada will announce retaliatory tariffs against the United States on Tuesday after Trump told Canadian leaders to “fall in line” or face consequences “far WORSE,” and after Carney accused Washington of trying to subordinate Canada.
Ontario Premier Doug Ford said in an interview with The Associated Press that he was ready for an economic war, telling the AP, "We’re all in,".
Trump responded to Ford’s stance with a social media attack, writing, "Someone should get these clowns to 'fall in line' or, the consequences for Canada will be far WORSE!"
The BBC added that Carney called Trump's latest levy threat unsurprising and accused the president of wanting to destroy Canada's auto industry, while also saying Canada is ready to resume talks only if the U.S. comes with the "right attitude".
Retaliation, industry stakes
The BBC said Canada’s response would be outlined at a news conference Tuesday at 11:00 ET (16:00 BST), with government leaders in business, finance and economic development.
“You're at war when you get attacked. We got attacked”
The Reuters report said Canada will impose tariffs on some U.S. goods starting September 8 in retaliation for 50% levies ordered by Trump on $20 billion in Canadian products, while also quoting Carney’s framing that "You're at war when you get attacked. We got attacked."
Reuters reported that auto stocks fell on the news, with shares of Ford down 3.6% and Stellantis down 4.2% on Monday afternoon, alongside Toyota down 1.5% and Honda down 2.1% in New York trading.
In the same Reuters account, Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, said, "A threatened U.S. tariff on Canadian auto parts will be paid by (the) US auto assembly."
The BBC warned that the escalating trade tensions are raising questions about the USMCA, saying "the risk of the USMCA unravelling has increased" and that it "would plunge Canada into recession".