Trump Threatens 50% Tariff Hike On Canadian Vehicles

Washington (GNP): US President Donald Trump has announced plans to raise tariffs on Canadian-made automobiles, trucks and auto parts from 25 percent to 50 percent, effective January 1, deepening a trade dispute between the two neighbouring countries.

The move follows the collapse of bilateral trade talks late last week, after negotiators from both sides accused each other of introducing unreasonable last-minute demands. Canadian officials said Washington had pushed for a clause restricting which countries Canada could sign trade deals with, while US Trade Representative Jamieson Greer said Canada had raised its own new conditions during the final round of talks.

Canada had walked away from the negotiating table late Friday, shortly before a US deadline that would have imposed a 50 percent levy on nearly 20 billion dollars worth of Canadian imports. The breakdown marked a sharp reversal from earlier in the week, when officials on both sides had voiced optimism that a new trade agreement was within reach.

Canadian Prime Minister Mark Carney said Trump’s latest tariff threat was not unexpected and accused the US administration of seeking to undermine Canada’s automotive industry, adding that Canada would only return to the table if Washington approached talks with a more constructive posture.

In response to the mounting pressure, Carney reiterated that Canada would impose reciprocal, dollar-for-dollar tariffs on US goods and announced 11 billion Canadian dollars in funding to build six icebreakers at a shipyard in Quebec for the Canadian Coast Guard, aimed at opening new winter shipping routes through the country’s northern and Atlantic waters as part of a broader push to diversify Canadian trade away from reliance on the United States.

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Ontario Premier Doug Ford, whose province anchors Canada’s auto manufacturing sector, criticized the tariffs sharply and proposed that Canada charge the US more for oil, gas, electricity and critical minerals exports. Trump responded on social media, dismissing Ford’s remarks and warning of worse consequences for Canada if provincial leaders did not fall in line.

The economic fallout is already being felt by businesses on both sides of the border. In Portland, Oregon, the owners of a clothing retailer said prices on a bestselling Canadian-made pillow line could rise by roughly 50 percent, though they are holding steady for now in hopes of a resolution.

The dispute has also renewed uncertainty over the future of the United States-Mexico-Canada trade agreement, which underpins 1.6 trillion dollars in regional trade; both Canada and Mexico have pushed for a 16-year extension, while the US has resisted renewing the pact in its current form.

Analysts at Oxford Economics warned that the growing risk of the agreement unraveling could push Canada toward recession and onto a permanently slower growth path. Jamieson Greer says, “They wanted more.”