Trump Threatens 50% Tariff on Canadian Cars Amid Escalating Trade War

Sun Sep 06 2026 06:29:33 GMT+0000 (Coordinated Universal Time)

US President Donald Trump announces a 50% tariff hike on Canadian automobiles, sparking a backlash from Ottawa and threatening a broader trade showdown.

The US trade war rages as Trump announces plans to raise tariffs on Canadian cars, trucks and parts to 50%, effective from January 1. Ottawa responded with a government emergency conference, promising to protect Canadian workers and businesses. Prime Minister Mark Carney vowed retaliation, while Ontario’s premier Doug Ford called the threat a “kiss my ass” moment. The moves risk unraveling the USMCA and could trigger costly tariffs across North America. Businesses on both sides warn of a price hike and potential recession.

Trump Threatens 50% Tariff on Canadian Cars Amid Escalating Trade War

President Donald Trump has warned that the United States will increase tariffs on Canadian automobiles, trucks and auto parts from the current 25% to a steep 50% starting on January 1. The move follows a collapse of trade negotiations last week, with both sides accusing each other of making unreasonable demands.

In response, the Canadian government announced an emergency meeting on Tuesday at 11:00 ET (16:00 BST) featuring key leaders in business, finance and economic development. The aim is to protect Canadian workers and businesses amid the turmoil.

Prime Minister Mark Carney slammed the tariff threat as an attempt to destroy Canada’s auto industry, and pledged that Canada would respond with reciprocal duties “dollar for dollar.” He also highlighted Canada’s economic reliance on the United States and announced a C$11 bn investment in six new icebreakers to open northern shipping lanes.

Ontario’s premier, Doug Ford, reacted sharply, calling the tariffs a “kiss my ass” response and suggesting Canada could counter by levying higher duties on U.S. oil, gas and critical minerals. Trump, via Truth Social, dismissed Ford’s comments as “bluster” and warned that “the consequences for Canada will be far WORSE”.

North‑American businesses are already feeling the strain. In Portland, Oregon, a provincial bedding manufacturer says its price for Canada‑made pillows could jump over 50% to $90 per unit, while others call for months of notice before imposing rates.

Both Canada and Mexico have urged the U.S. to extend the USMCA for another 16 years, but Washington has stalled, raising the risk that the trade pact could unravel. Economists warn that such a breakup could plunge Canada into recession and set it on a permanently lower growth path.

The situation remains fluid, with Canadian officials seeking to resume talks only if the U.S. comes with the “right attitude” to avoid a brand‑new economic conflict on North‑American borders.