US-Canada trade war escalates as Trump threatens tariff hike on vehicles

President Donald Trump has threatened to hike US tariffs on automobiles originating in Canada, as the trade war between the two neighbours continues to heat up. Trump said on Monday that he will increase tariffs on Canadian cars and trucks, as well as auto parts, from 25% to 50% as of 1 January. It comes after US-Canada trade talks collapsed late last week, with each side accusing the other of making unreasonable last-minute demands. Late on Monday, Canada officials announced a news conference on Tuesday where they would outline how the country would respond to the trade war and work to "protect and support Canadian workers and businesses during these challenging times". The news conference at 11:00 ET (16:00 BST) will include government leaders in business, finance and economic development.

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Scoop News DeskUS-Canada · Published Tuesday, August 25, 2026 at 2:51 AM UTCUpdated Tuesday, August 25, 2026 at 1:05 PM UTC

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Canada accounts for 60% of total US crude oil imports and close to 100% of US natural gas exports, according to Canadian government data. On Monday, Trump's tariff threats to Canada's auto industry followed Carney declaring the country would counter his levies with reciprocal tariffs on US goods "dollar for dollar". 'Half my business will be gone' - firms in Canada and US fear trade war How Canada could hit back to hurt the US economy - and Trump Trump says Canada wants 'benefits' of being US state after trade talks collapse Carney said he was focused on supporting Canadian businesses impacted by new 50% US tariffs after the Friday deadline expired, as well as building infrastructure to diversify Canada's trade, which historically has relied heavily on the US. Carney faces crucial test after walking away from Trump's deal Watch our pick of standout clips from across the BBC China warns it will protect its interests after US widens sanctions against Iran Man dies in crash after police pursuit Yellow weather warnings issued as thunderstorms and flooding forecast Sir Chris Hoy: Campaigning for cancer screening should not be down to me The grieving family who say the coroners' courts aren't working 'What you see is what you pay' - why some US restaurants are banning tips Charity?

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