'We don't need Canada': Trump threatens northern neighbor with more tariffs on cars, trucks

President Trump on Monday escalated his trade war with Canada, threatening to impose a steep 50% tariff on all Canadian cars, trucks, auto parts and steel.

The new tariffs would go into effect in January 2027.

Mr. Trump said new tariffs were necessary to close the $60 billion budget deficit that exists between the two neighbors.

“Canada will be treated like a state no longer,” Mr. Trump said on Truth Social. “On Trade, and in other ways, also, they are among the worst nations in the world to deal with. They feel entitled, and yet, we don’t need Canada, they need us. They do 95% of their business with the U.S., with us the exact opposite.”

Mr.Trump’s latest tariff threat would double the top-line U.S. duties on Canadian auto imports, which currently sit at 25%. Canada has sought to lower those tariffs as part of a new trade deal with the U.S. that was close to being completed before falling apart late Friday night. 

U.S. tariffs on Canadian steel imports are already at 50%. 

The move deepens the trade feud after last-ditch efforts to strike a deal collapsed Friday. In response, Mr. Trump slapped 50% tariffs on roughly $20 billion worth of Canadian goods on Saturday morning. Canada fired back, threatening retaliatory dollar-for-dollar tariffs starting Sept. 8.

Canadian Prime Minister Mark Carney said Saturday that his tit-for-tat measures will include tariffs on steel, dairy, appliances, agricultural equipment, pulp, paper and electronics.

He said that the United States “asked too much and offered too little” during trade negotiations. He also called the Trump administration’s proposals “uneconomic, unfair, and undermined the net benefits for Canada.”

Mr. Trump said Canada “wants the benefits of being a state without being one.”

Canada did offer some concessions as part of the deal, including removing its retaliatory measures from last year and returning US alcohol to Canadian shops. But the U.S. did not agree to “sensible economic terms ” for core industries, including automotives.

When asked about critical minerals, Mr. Carney said Canada would never give the U.S. “exclusive access,” something American negotiators had sought.

Mr. Trump initially threatened steep tariffs but then paused them last week for three days to give top trade officials from both countries time to work out a deal.

“Canada declined to finalize the trade deal under the terms agreed earlier this week,” US Trade Representative Jamieson Greer said early Saturday. He said the deal included “significant tariff reductions on steel, aluminum, autos, and lumber,” as well as “a historic economic and national security partnership.”

“Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walkbacks of other commitments by Canada have upended the careful balance reached in the past days,” Mr. Greer said.

The Canadian auto market is small compared to the U.S., with fewer than 2 million new vehicles sold there in 2025, compared to more than 16 million sold in the U.S. 

Only 5.4%, or roughly 861,000, vehicles produced in Canada were sold last year in the U.S., according to GlobalData.

Toyota and Honda represented 76.5% of Canada’s vehicle production in 2025, and each produced more vehicles in Canada than Ford, General Motors, and Stellantis combined, said Global Data, which represents non-Detriot automakers.