Trump says the U.S. will increase tariffs on Canadian cars and automotive parts to 50%, effective January 1, following the collapse of trade talks. The announcement, made via Truth Social, frames Canada as no longer a U.S. state and accuses it of being a difficult trade partner. Canadian Prime Minister Justin Trudeau responded, vowing to match U.S. levies dollar for dollar and calling the move a miscalculation. U.S. Trade Representative Katherine Tai noted prior offers to cut steel and aluminum tariffs, while Ontario Premier Doug Ford delivered a defiant retort.

The tariffs could impact integrated supply chains, with Ford, GM, and Stellantis seeing share drops. Analysts warn prolonged uncertainty may freeze investment, and industry groups predict higher costs for both nations' auto sectors.