President Trump announced a slew of tariffs on imports last week, with a proposed 35% tariff on Canadian goods, including in the automotive sector, which could deeply affect American drivers. Trump announced the tariffs on Truth Social with screenshots of a letter sent to Canada’s prime minister,

The Canadian prime minister said it may not be possible to escape U.S. tariffs even with a bilateral agreement to resolve the current tariff row.

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.

Under the new policy, Canada will apply a 25 percent tariff on steel imports from any country — except the U.S. — if the original steel was melted and poured in China.

Trump this spring imposed a 25% tariff on cars and car parts, including those from Canada. But certain cars and parts qualify for preferential treatment under the USMCA, meaning the 25% tariff applies only to the non-U.S. content of the automobile or part.

Provinces across Canada pulled American-made whiskey, vodka and other alcoholic drinks from their shelves earlier this year in response to tariffs. U.S. spirits companies are paying the price. From early March through the end of April,

Canada’s steel industry fears that Chinese steel facing steep tariffs in the United States will be sent north and overwhelm the Canadian market.