President Trump Threatens a New 50% Tariff on Canadian Cars

Trade tensions between the U.S. and Canada are still simmering—and its latest installment is coming for the car industry.

On Monday, President Donald Trump threatened to hike tariffs on Canadian cars, trucks, steel, and more to a whopping 50 percent. The new levy, which would begin on January 1, 2027, comes as recent trade negotiations between the two nations completely dissolved over the past week.

The source of all this tension stretches back to 2025, when the U.S. imposed its first round of tariffs on Canada. As a result, our northern neighbor banned the sale of American booze (which is still ongoing in nearly all Canada’s provinces today). After a bit more back and forth, Trump announced a 50 percent levy on Canadian whisky, beer, and more goods in July. The tariff was set to go into effect on August 19, but the U.S. government paused the move for three days, saying that the U.S. and Canada had reached a trade deal, pending finalization of documents.

The agreement has since gone up in flames. Officials for both countries said no trade deal had been reached late last Friday, with both sides pointing fingers at the other for reasons why the talks went awry. In response to the collapse in negotiations, Canadian Prime Minister Mark Carney on Saturday said his country was “at war” with the U.S. over trade and would slap its own tariffs on American electronics, food, and more, according to The New York Times.

That brings us back to this new 50 percent levy on Canadian cars. Trump took to social media to announce the latest installment in the trade saga, saying that Canada is one of the “worst nations in the world to deal with.”

“They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!” the president said in his post.

That levy, should it come to fruition, would have ramifications on the car industry in both nations. To give you an idea, U.S. tariffs on automakers across the world announced back in April 2025 cost those companies $35.4 billion over the last year ending in March. We’ll keep you updated should the new levy come to fruition.