Trump floats 100% tariff on Canadian vehicles
President Trump may have paused his initial tariffs on Canada, but it appears he’s far from letting up on them.
President Donald Trump has suggested imposing tariffs of up to 100% on Canadian-made vehicles, a move that could drastically upend the deeply integrated North American auto industry. In an interview with Fox News' Bret Baier, Trump claimed Canada had "stolen" the U.S. automobile industry and threatened to impose the tariff in future trade negotiations.
The sharp escalation came in response to a question from Baier about when consumers can expect to see grocery and energy prices come down. "If we don’t make a deal with Canada, we’re going to put a big tariff on cars," Trump said. "Could be a 50 or 100 percent because we don’t want their cars. We want to make the cars in Detroit."
Related: Toyota revives the Celica with high-performance GR badge
A deeply connected industry
Canada and the U.S. have long shared an interconnected automotive supply chain dating back to the 1965 Auto Pact, which eliminated tariffs on cars and parts. This agreement later evolved into NAFTA and then the U.S.-Mexico-Canada Agreement (USMCA), which Trump negotiated in his first term. Many vehicles sold in the U.S., including the Chevrolet Silverado, Chrysler Pacifica, and Dodge Charger Daytona, are assembled in Canada with components that cross the border multiple times before final assembly.
Industry experts warn that tariffs of this magnitude would not only impact Canadian automakers but also disrupt U.S. car manufacturers relying on Canadian suppliers. "A tariff on Canadian-made cars would be akin to cutting off one’s nose to spite one’s face," Tu Nguyen, an economist at RSM Canada, told Canadian outlet Global News. "The North American auto manufacturing sector is so integrated that a car can cross the border up to eight times before it is fully assembled."
Related: 2025 Toyota Supra vs BMW Z4: affordable thrills or visceral luxury?
Warnings of production shutdowns
A tariff of this scale could have immediate and devastating effects on North American vehicle production. Flavio Volpe, president of the Automotive Parts Manufacturers Association, warned that a severe tariff would "cause the cessation of production by American car companies."
Brian Kingston, CEO of the Canadian Vehicle Manufacturers Association, echoed these concerns, saying that "if you put in place tariffs of the scale that are being contemplated, it could lead to production stoppages, job losses, and price increases for American consumers." Analysts estimate that new vehicle prices in the U.S. could rise by at least $6,500 if the tariffs were implemented.
Related: Ford CEO trashes large EVs saying the problems are "unresolvable"
The political and economic fallout
Trump’s tariff threats come at a time when U.S.-Canada trade relations remain crucial for both economies. With the USMCA agreement up for renegotiation in 2026, Trump’s comments could signal a broader push to reshape trade policies in the region.
In his interview, Trump asserted that Canada "stole" the auto industry, but Volpe said that’s an “outright lie.”
“The Canadian auto sector was built by Ford and GM more than a century ago,” Volpe said. “We built this industry together, with the best of American intentions and to the benefit of Detroit.”
Final thoughts
If Trump follows through on his threat, Canada may retaliate with countermeasures. Trump’s planned 25% tariff on Canadian imports has already provoked one Canadian politician to propose 100% tariffs on U.S.-made Teslas, further straining economic relations. With billions of dollars and thousands of jobs on the line, industry leaders and government officials on both sides of the border will be watching closely.
Love reading Autoblog? Sign up for our weekly newsletter to get exclusive articles, insider insights, and the latest updates delivered right to your inbox. Click here to sign up now!
Related: Lucid wants to sell a lot more than just cars
