Trump Warns Canada Car Tariffs Could Rise Further as Trade Tensions Stay High

Former U.S. President Donald Trump said Tuesday that the 25 percent tariff on cars imported from Canada to the United States could be raised. He made the statement during a press meeting in the Oval Office.

He said Canada is already paying 25 percent but suggested that rate could increase. Trump explained that the goal is to support American carmakers and reduce reliance on foreign vehicles. He said the U.S. wants to build and use more cars made at home.

Trump Says Federal Reserve Chair Will Stay

Trump also addressed recent concerns about Federal Reserve Chair Jerome Powell. There had been speculation that Trump might fire Powell due to disagreements over interest rate policy. But Trump made it clear he had no plans to do so.

He said it is the perfect time to lower interest rates and that he wants the Fed to act faster. However, he also added that if Powell does not lower rates, it is not the end of the world.

Trump’s previous criticism of Powell had caused unease in financial markets, especially after Powell said U.S. tariffs could increase inflation.

U.S. May Reduce Tariffs on Chinese Products

Since returning to the White House in January, Trump has imposed more tariffs on Chinese goods. The total tariff rate now stands at 145 percent. These measures were put in place because of China’s alleged involvement in the fentanyl drug trade and what Washington calls unfair trade practices.

China responded with 125 percent tariffs on U.S. goods. Trump admitted that 145 percent is a high number and said it will be lowered. He said the final rate will not be zero but much lower than it is now. He also said China needs to agree to a trade deal if it wants access to the U.S. market.

Treasury Secretary Sees Hope for a Deal

U.S. Treasury Secretary Scott Bessent gave more insight into the administration’s plans during a private meeting at the Spring Meetings of the International Monetary Fund and World Bank. According to someone in the room, Bessent said the high tariffs were similar to a trade embargo.

However, he also said he expected a de-escalation soon. After news of his comments broke, major indexes on Wall Street jumped. Asian stock markets also moved higher the next day.

White House Confirms Progress With China

White House Press Secretary Karoline Leavitt told reporters that trade talks with China are moving in a good direction. She said the administration is preparing the ground for a potential agreement. She added that the parties involved seem to want a deal, although China has not yet confirmed it is in formal negotiations.

Global Focus on Washington Trade Talks

As finance leaders and central bankers gather in Washington this week, many are watching U.S. trade policy closely. Countries are especially interested in the outcome of U.S.-China talks.

China’s foreign minister Wang Yi spoke with officials in Britain and Austria. He asked them to support open international trade and help maintain market stability. The focus now is on whether the U.S. and China can reach a deal during these key meetings.

Japan Also Faces Tariff Pressure

Japan is also trying to manage the effects of new U.S. tariffs. Reports say that Japanese trade envoy Ryosei Akazawa may visit Washington again next week. Japan might offer some concessions to reduce tensions with the U.S.

Japanese company Sumitomo Rubber, which owns Dunlop, has announced a price increase. Starting in May, tires for cars and small trucks sold in the U.S. and Canada will cost up to 25 percent more.