The US and Canada are in a new trade fight. US President Donald Trump plans a 50% tax on cars, trucks, and car parts from Canada from 1 January 2027. Canadian Prime Minister Mark Carney has added new taxes on many US goods. Canada now has a 50% tax on US steel and aluminium. It also has taxes on some US cars, wood, furniture, home machines, and other goods.

These taxes may make cars and homes more expensive. Car companies use parts from the US, Canada, and Mexico. Builders also use Canadian wood and US materials. Shops and companies may pass higher costs to buyers. However, Canadians can buy some goods from Canadian companies instead. Many parts of Canada may also stop selling US alcohol again. US alcohol sales to Canada already fell by more than 70% last year.

Jobs may also be at risk. Canada’s forest industry has almost 200,000 workers, and many companies sell wood to the US. High taxes may make this harder. One expert says the new Canada fight may cost an average US family about $3. But all US tariffs around the world may cost an average family about $1,000. Canada, the US, and Mexico must also decide what to do with their trade deal. More trade talks may happen, but the fight could delay them.