The US and Canada broke off negotiations on a new trade deal. Trump is retaliating on Monday with fresh tariffs.
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Big Canadian tariffs are making a comeback.In Truth Social posts on Monday, President Donald Trump threatened a plan to impose another batch of 50% tariffs on Canadian-made products. This one impacts cars, trucks, auto parts, and steel, and would start on January 1.The ultimatum is escalating an already bitter trade fight with one of America's closest economic partners."Canada has been ripping off the United States of America for years," he wrote. "Canada will be treated like a State no longer!"The post came after US-Canada negotiations collapsed Friday, triggering a separate set of 50% US tariffs on roughly $20 billion in Canadian goods. Canadian Prime Minister Mark Carney has vowed to retaliate "dollar-for-dollar," beginning September 8.The countries have been trying to ease tariffs and disputes ahead of the scheduled review of the USMCA, the North American trade pact negotiated by Trump in his first term. That deal replaced NAFTA.Stakes are particularly high for US automakers. Supply chains in the US and Canada are highly interconnected, and vehicle parts typically cross the border multiple times before a finalized vehicle hits American dealerships.Here's what smart people are saying about the impact of the fresh tariff threats:Paul Krugman, Nobel-winning economist
