President Donald Trump sought to boost pressure on Canada on Monday, warning that U.S. tariffs on all cars, trucks and automotive parts from the U.S.' northern neighbor would be increased to 50% starting January 1 after trade talks collapsed over the weekend.
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 collapsed 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.
"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.
Canada has consistently been one of the top two U.S. trading partners and last year, U.S. goods and services trade with Canada totaled $872.3 billion, down 4.6%.
Canada exported over three-quarters of its goods to the U.S. and imported almost half of its goods from the U.S.
U.S. auto production is heavily integrated with Canada and Mexico and the tariffs — depending on the specifics — could have drastic impacts on American production.
