U.S.-Canada trade war escalates as Trump threatens 50% tariffs

U.S. President Donald Trump announced that tariffs on Canadian cars, trucks, automotive parts and steel would be raised to 50% from January 1, 2027. The announcement came after 50% U.S. tariffs on around $20 billion worth of Canadian goods took effect on August 22.

“Canada has been ripping off the United States of America for years,” Trump wrote on Truth Social, accusing Ottawa of maintaining high tariffs on U.S. agricultural products.

“On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump said, urging manufacturers to relocate production. “Build in the U.S. and there are ZERO TARIFFS.”

The latest escalation follows the breakdown of negotiations after Washington and Ottawa had appeared close to reaching an agreement. Canadian Prime Minister Mark Carney said the United States introduced new terms late in the talks that Canada could not accept.

“We cannot accept what they've offered, and we will not give what they've asked,” Carney said. He described the U.S. proposals as “uneconomic, unfair” and said they called into question “the reliability of any deal.”

Carney also described the tariffs as an attack on Canada when asked whether the two countries were now engaged in a trade war.

“You're at war when you get attacked. We got attacked,” he said.

Canada has vowed to retaliate, with new tariffs on U.S. goods scheduled to take effect on September 8. The measures are expected to target sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

“Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses,” Carney said.

Earlier, Qazinform News Agency reported that the Trump administration had warned Canada against escalating its trade dispute with the United States after negotiations between the two countries collapsed and new tariffs came into force.