// BBC WORLD NEWS — MONDO
What tariffs will really cost Canadians and Americans
Donald Trump and Mark Carney have both declared tariffs on each other's country
A raft of new tariffs have been announced during the latest escalation of the trade war between the US and Canada.
The North American neighbours have been locked in a bitter economic conflict since US President Donald Trump launched his flagship trade policy on his return to the White House.
This week saw the latest move by the Canadians with Prime Minister Mark Carney imposing retaliatory import taxes on a host of US goods, after Trump threatened hikes of his own.
As the dust settles in this tit-for-tat tariff row, what will be affected most on both sides of the border?
If Trump's threat to raise tariffs on Canadian vehicles from 25% to 50% from 1 January 2027 becomes a reality, then that would deal a further blow to the automotive industry.
Cars, trucks and parts are among the main goods traded between the US, Canada and Mexico, with the manufacturing sector and supply chains stretching across borders.
Despite previous tariffs increasing costs for manufacturers, car dealerships have absorbed the "lion's share" to date, according to Bernard Yaros, lead economist at Oxford Economics.
"But that cushion is wearing thin," he adds. "The recently threatened 50% tariffs on Canadian autos, trucks, and car parts would feed through to consumer prices more readily than before."
Yaros thinks higher costs on imports to the US could accelerate a trend of manufacturers prioritising luxury cards, SUVs and pick-up trucks and push up prices in the used-car market if supplies of new but less-expensive vehicles becomes tight.