Canada’s minister responsible for U.S. trade said Ottawa may announce retaliatory tariffs on American goods as soon as Tuesday, following the collapse of trade negotiations and a threat by President Donald Trump to impose a 50% tariff on Canadian cars, trucks and automotive parts.
Dominic LeBlanc told CNBC in an interview that the government intends to proceed with protective measures after talks broke down last week. The breakdown centered on disputes over whether U.S. tariff relief would cover medium- or heavy-duty trucks, he said. "It shouldn’t surprise anybody," LeBlanc said. "Our preference was not to do that."
Trump’s administration had previously proposed a 25% tariff on Canadian vehicles and a 15% rate under a potential deal, but escalated to a 50% levy set to take effect January 1, 2027. The threatened tariffs apply to all cars, trucks and automotive parts imported from Canada, raising risks for integrated North American auto supply chains. U.S. automakers rely heavily on Canadian-made components, and higher duties could increase production costs for American manufacturers and consumers.
The timeline for Canada’s response remains uncertain, though LeBlanc indicated an announcement could come this week. The dispute follows Monday’s threat from Trump, which marked a sharp escalation after negotiations stalled.
