Carney rejects 'whatever deal' on car tariffs as American levy heads to 50%

Summary

On Saturday in Manila, Prime Minister Mark Carney said Canada will not settle for a deal that is inconsistent with a viable Canadian auto sector. Trump's tariff on Canadian cars, trucks, auto parts and steel is set to rise to 50% on January 1, 2027. Canadian-made cars pay 25% at the border, only on non-American content, and nearly 90% of production goes to the United States. Ottawa walked away from an August American offer that would have cut the car tariff to 15% but excluded medium and heavy trucks.

Carney has since held two calls with Trump, the second long and substantive, with Jamieson Greer and Stephen Miller on the line. He sees progress toward a possible bilateral deal but says Canada is not there yet. Meanwhile, Canada agreed a trade deal with the Philippines and substantially concluded free trade talks with ASEAN, which Ottawa estimates will add C$2 billion to the economy.

The auto industry is divided. Detroit car makers say Canada should take the window while it is open, calling waiting naive. Honda and Toyota want a deal but warn against locking one in, since a tariff Canada signs could outlast any decision by Washington to drop its own. The video calls the locked-in tariff, not the rate, the real danger.

Key points

• Trump's tariff on Canadian cars, trucks, auto parts and steel is set to rise to 50% on January 1, 2027.
• Canadian-made cars pay 25% at the border, charged only on the non-American content.
• Nearly 90% of Canadian car production is shipped to the United States.
• The August American offer would have cut the headline car tariff to 15% but excluded medium and heavy trucks.
• Canada and the Philippines agreed a trade deal covering more than 90% of tariff lines.
• Canada and ASEAN substantially concluded free trade talks, with an estimated C$2 billion added to Canada's economy.

Questions answered