The threatened duties could disrupt North America’s auto supply chain after trade negotiations between Washington and Ottawa collapsed.
President Donald Trump threatened to raise US tariffs on Canadian cars, trucks, and auto parts to 50% starting January 1, 2027, Reuters reported.
The trade deal under discussion would have cut tariffs on Canadian cars and light trucks from 25% to 15%, and reduced aluminum and steel duties from 50% to 25%. Negotiations collapsed over several issues, including coverage for heavier trucks.
The escalation threatens one of the world’s most integrated auto supply chains. Reuters reported that higher tariffs could raise costs for US automakers and consumers, while shares of Ford, Stellantis, General Motors, Toyota, and Honda fell.
Canada plans retaliatory tariffs on some US goods starting September 8. Carney said a mutually beneficial deal remains possible if the US approaches negotiations as a partner.
