U.S. to raise tariffs on Canadian autos to 50% by 2027

President Donald Trump said on Monday that the United States will raise tariffs on Canadian-origin cars, trucks and automotive parts to 50% starting Jan. 1, 2027, following the collapse of trade negotiations last week. The proposed increase would double the current 25% duty on Canadian auto imports, while tariffs on Canadian steel already stand at 50%.

The announcement came after the United States imposed 50% tariffs on about $20 billion of Canadian goods, including wine, cement and hockey sticks, in retaliation for what Washington described as Canadian trade discrimination against U.S. products. U.S. Trade Representative Katherine Tai told CNBC’s “Squawk Box” that the two sides could not reach an agreement because “the Canadians wanted more” in the final hours of talks.

Justin Trudeau said Canada would respond “dollar for dollar” to the new U.S. tariffs. He also warned that the measures could disrupt integrated supply chains that rely on cross-border movement of automotive parts.

“Canada has been ripping off the United States of America for years,” Trump wrote on his Truth Social platform, adding that the country “will be treated like a state no longer.”

“In the last hours, I think there were things that the Canadians just — you know, they wanted more,” Greer said.

Industry analysts note that the Canadian auto market is small relative to the United States, with fewer than 2 million new vehicles sold in Canada in 2025 compared with more than 16 million in the United States. Japanese manufacturers Toyota and Honda now account for the majority of vehicle production in Canada, surpassing the combined output of the Detroit-based automakers.

The tariff increase adds to uncertainty for automakers that have built supply chains on the premise of free trade between the two countries, as parts may cross the border multiple times before final assembly.