WASHINGTON, Aug 24 (Reuters) - President Donald Trump on Monday threatened to raise U.S. tariffs on all cars, trucks and automotive parts from Canada to 50% starting January 1, 2027, escalating a trade fight after negotiations collapsed last week.
The trade deal on the table would have cut the top-line tariff rate on Canadian cars and light-duty trucks from 25% to 15% and the tariffs on aluminum and steel from 50% to 25%, but the deal fell apart on Friday over a number of points of contention, including whether the U.S. tariff relief would have applied to medium- or heavy-duty trucks.
The escalation threatens to disrupt one of the world's most integrated auto supply chains. U.S. auto production is heavily reliant on Canadian-made parts and vehicles, and higher tariffs could raise costs for American automakers and consumers while deepening a trade standoff that has already weighed on auto stocks.
"Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer!" Trump wrote in a social media post.
"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!" Trump said.
Trump wants Canada to come to the table and negotiate in good faith, U.S. Treasury Secretary Scott Bessent told reporters on Monday.
At a press conference in Quebec on Monday, Canadian Prime Minister Mark Carney said a "mutually beneficial deal" with the U.S. was possible, but only if Americans respect Canada's sovereignty.
"When the Americans go to the negotiating table first with the right attitude toward our industry and a true partnership, of course we'll come to the negotiating table," Carney said at a briefing announcing an investment in six new Canadian icebreaker ships.
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