Saul Loeb | AFP | fake images
“Canada has been ripping off the United States of America for years,” Trump wrote in a Truth Social post, accusing the longtime trading partner of hurting American farmers through its own tariff policies.
“It is not sustainable and NOT ANYMORE!” he wrote. “On January 1, 2027, tariffs on all cars, trucks, large and small, auto parts and steel will increase to 50%.”
US tariffs on Canadian steel imports are already 50%.
On Saturday, the United States imposed 50% tariffs on about $20 billion in Canadian goods, including wine, cement, hockey sticks and other products. Those duties were imposed in retaliation for alleged Canadian trade discrimination against American automobiles, alcohol and dairy.
They would have been avoided if the two sides had reached a trade deal, but Canada’s negotiators left Washington empty-handed on Friday night. The parties have blamed each other for attempting to make unreasonable last-minute changes to their agreement.
“In the last few hours, I think there were things that Canadians just wanted more of,” U.S. Trade Representative Jamieson Greer told CNBC’s “Squawk Box” on Monday.
Later that morning, Trump, in his Truth Social post, declared: “Canada will no longer be treated as a State!”
He went on to attack Canada as “one of the worst nations in the world to deal with” in trade and other areas.
“They feel entitled and yet, WE DON’T NEED CANADA, THEY NEED US! They do 95% of their business with the United States, with us, exactly the opposite!” Trump wrote.
The Canadian car market is small compared to the US: fewer than 2 million new vehicles were sold there in 2025, compared to more than 16 million sold in the US.
According to GlobalData, only 5.4%, or approximately 861,000, vehicles produced in Canada were sold in the United States last year.
Detroit automakers have scaled back when it comes to vehicle production, while Japanese automakers Toyota and Honda have significantly increased production in recent years.
Toyota and Honda accounted for 76.5% of Canada’s vehicle production in 2025, with Toyota and Honda each producing more vehicles in Canada than Ford, General Motors and Stellantis combined, according to a major trade organization that represents automakers outside Detroit.
Trump’s mercurial tariff agenda has been a major source of uncertainty for automakers, whose supply chains were built on free trade between countries. Auto parts can cross borders multiple times in different forms before finally being installed on a new vehicle, potentially exposing them to multiple tariff burdens.
