news
Share icon

Share

Canada tariffs on cars to double to 50% as Trump escalates trade war

Published 08:21 25 Aug 2026 BST

Updated 06:57 25 Aug 2026 BST

Lum Haliti
Canada tariffs on cars to double to 50% as Trump escalates trade war

Homenews

It comes as the trade talks collapsed

On 1 January Canada tariffs on cars, trucks and auto parts will double to 50%, following the decision by US President Donald Trump to escalate his trade war with the neighbouring country.

On Monday, Trump announced the rise from the current 25% rate, days after US-Canada trade talks collapsed.

It comes as each side has accused the other of making unreasonable last-minute demands.

Article imageLogo Camera in article

Why the Canada tariffs row escalated

Late on Friday, Canada walked away from the negotiating table, moments before a US deadline that would have added a 50% levy to nearly $20bn (C$28bn; £14bn) of Canadian imports.

This turn was an abrupt one, as days earlier both governments had sounded optimistic that a deal was within reach.

According to Canadian officials, the US tabled “unacceptable” eleventh-hour demands, including a clause limiting which countries Canada could sign its own trade deals with.

Article imageLogo Camera in article

On the other hand, the US officials insist it was Canada that moved the goalposts.

Prime Minister Mark Carney called the latest threat unsurprising and accused Trump of wanting to destroy Canada’s auto industry, saying talks can resume only if the US turns up with the “right attitude”.

The brinkmanship is familiar from Trump’s recent high-stakes dealmaking, which has leaned heavily on maximum pressure.

Canadian government leaders in business, finance and economic development will set out the country’s response at a news conference at 09:00 ET (14:00 BST) on Tuesday, promising to “protect and support Canadian workers and businesses during these challenging times”.