Trump announces 50% tariff on Canada for automotive parts, cars, trucks and steel
President Donald Trump announced Monday he would increase tariffs on Canada for cars, trucks, automotive parts, and steel to 50%.
Trump said in a Truth Social post that the 50% tariff would start Jan. 1.
“Build in the U.S. and there are ZERO TARIFFS,” Trump said in his post. “Canada will be treated like a State no longer!”
Automotive News reports that Canada is America’s second-largest trading partner. It adds a trade deal that was on the table would have cut the top-line tariff rate from 25% to 15% and the tariffs on aluminum and steel from 50% to 25%.
“But the deal collapsed Aug. 21 over a number of points of contention, including whether the U.S. tariff relief would have applied to medium- or heavy-duty trucks,” according to Automotive News.
The publication adds that U.S. auto production is “heavily integrated” between Canada and Mexico and the tariffs, which “depending on specifics, could have drastic impact on American production.”
Canada responded Tuesday to Trump’s statements with retaliatory tariffs on about $20 billion worth of American goods, with some facing duties as high as 50%, according to the Associated Press.
OEM suppliers are already facing distress due to multiple global factors, including tariffs.
Geopolitical changes have increased the cost of OEM parts, while aftermarket parts have remained relatively stable, according to a recent report published by PartsTrader.
However, a recent Enlyte Envisions Trends 2026 Report found that aftermarket prices have increased by 3.89% in 2025 and 3.08% in 2024. Yet, OEM prices have increased at a higher rate than aftermarket parts, by 4.21% in 2025 and 3.52% in 2024.
A 15% tariff cap on Taiwanese auto parts in June benefits aftermarket parts manufacturers.
Automotive Body Parts Association (ABPA) Executive Director Edward Salamy said in a press release that the recent decision to cap Section 232 tariffs on Taiwanese automotive parts is a positive development for the collision repair industry, automotive aftermarket, and consumers.
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