Fears that resurgent Midwest city famed for its blue collar industries could be plunged back into financial despair thanks to Trump's new tariffs on Canada

Concerns for Detroit are mounting as locals fear the city could be plunged back into financial despair amid President Trump's tariff war with Canada threatens its automotive industry.

Detroit's most profitable products face huge disruption as President Donald Trump is set to increase tariffs on cars, trucks, automotive parts and steel from Canada to 50 percent by 2027. 

The president announced the tariff increase on Monday after the two countries failed to reach a trade deal on Friday, sparking a tense back-and-forth between Trump and Canada's Prime Minister Mark Carney.

'Build in the US and there are ZERO TARIFFS. Canada will be treated like a state no longer,' Trump wrote on social media. 

'On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON'T NEED CANADA, THEY NEED US!' 

The Midwestern city in Michigan, however, may disagree. 

Major auto manufacturers such as Ford Motor Co, General Motors Co and Stellantis NV all with headquarters in Detroit also handle manufacturing operations in Canada. 

Stellantis puts its Chrysler brand Pacifica minivan together across the border in Windsor, Ontario, while Ford was geared up to begin assembling F-Series Super Duty trucks near Toronto in Oakville later in the year. 

Both Ford and General Motors also produce engines in Canada for vehicles in the US, the Wall Street Journal reported. 

Just last year, GM took Ford's number one spot as the largest manufacturer in the state of Michigan with Stellantis in third. The Detroit area produced more than 1.7 million vehicles annually, making up around 17 percent of the US total volume, according to the Detroit Regional Partnership.

From 2020 to 2024, Michigan also saw more than $36 billion in automotive investments. Canada made up around eight percent of North American vehicle production in 2025, according to Omdia. 

Trump, however, wrote on Monday that Canada 'has been ripping off the United States of America for years.'

'Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots, and has long created a 60 Billion Dollar Deficit between our two countries. Not sustainable and NOT ANYMORE,' he continued. 

Economist Patrick Anderson told the Detroit News that the 'dollar for dollar' retaliatory tariffs and recent threats on Canadian automotive products 'would be an absolute blow to the auto industry on both sides of the border.'

'It would mean plants closing, and many job losses in Michigan, Ontario, Ohio, Indiana, and Wisconsin. Both these countries have time to walk back from a real trade war before it happens. Let's hope they do, because nobody in North America will benefit from it.'

Carney said in a statement that, during the trade deal discussions, the US proposed last-minute changes that were 'unfair, uneconomic and called into question the reliability of any deal.'

'The US intends to impose a 50 percent tariff on roughly $28 billion of Canadian goods. Canada will match those tariffs dollar for dollar to protect our workers and businesses,' Carney added. 

'Canada has what the world wants. And we will not allow any nation to determine our future. We will set our own course to keep building Canada strong for all.'

As talks came to a close on Friday, Carney told reporters: 'You're at war when you're attacked, and we got attacked.'

Trump fired back and posted on social media that the US is 'giving serious consideration to changing the name of Lake Ontario to Lake America.'

'We don't expect to be doing much business with Ontario any longer,' he said. 

Canada responded on Tuesday with an announcement of tariffs on around 700 US products set to kick in on September 8. 

In response to Trump's escalation, Carney said it was 'not a surprise' and told reporters: 'What message does that send to the workers in Michigan and Ohio and Kentucky and Alabama, who rely on Canadian demand?' 

'We're their largest customer for automobiles, more than the European Union, Japan, Korea, many others combined, and the United Kingdom,' he added. 

'This is the most successful Automotive partnership in history. It's existed for all my life, for 60 years. And the president is doing what we not just suspected, but we had confirmed through the terms that they were offering.'

He went on, 'Instead of a quick change to the terms in the automobile industry, they were putting on the table terms that gradually would have that impact, and we wouldn't accept that. So it's very revealing that this is where they go now. 

'There is a mutually beneficial deal possible here, but it has to be one that respects Canada's sovereignty, that respects our independence, that uses our complementary strengths to build something better, not tear apart for short-term gain. That's the offer.'

Flavio Volpe, the president of Canada's Automotive Parts Manufacturers' Association, posted on social media that the price of the tariffs threatened against Canadian auto parts would be paid by the US auto assembly. 

'Without those specific parts, auto assembly throughout the US would halt,' Volpe added. 

Meanwhile, American Automotive Policy Council President Matt Blunt urged US and Canadian negotiators to 'reach a deal that enhances North American auto competitiveness and brings about a successful USMCA review.' 

Unifor, the Canadian union representing autoworkers, said: 'Another Monday, another threat. Same message. President Trump’s latest intimidation tactic, threatening to impose 50 percent tariffs on Canadian cars, trucks, auto parts and steel is another attempt to force Canada into surrendering our auto industry and the good jobs that it supports.'

'The US administration fails to recognize that our highly integrated auto industry means ongoing instability hurts workers on both sides of the border & makes it increasingly difficult to build cars in North America. That’s the opposite of what auto workers need right now,' the statement continued, Detroit News reported. 

'Canadian and American auto workers have suffered the same fate, with plant closures and job losses because of significant non-North American imports. We need to resolve this, together.' 

Current tariffs on automotive goods from Canada stand at 25 percent, costing businesses around $5.7 billion in import taxes on $61 billion in vehicles and car parts since April 2025, the Detroit News reported. 

Disagreements during Friday's trade deal saw two main points of tension, including whether Canadian parts inside of vehicles would be exempt from tariffs as American-made parts currently do. 

The other questioned how medium and heavy-duty pickup trucks assembled in Canada would be tariffed. 

According to Carney, US negotiators didn't want to offer the same tariff relief for larger and heavy-duty pickups, a decision the prime minister said had 'no rationale.'

He also claimed that the US had wanted to include 'unacceptable' language to limit Canada's trade deals with other nations. 

'But I will say this, which is that the Canadian team: Unified. You cannot say that about the United States' Administration,' he added. 

The Daily Mail reached out to the White House, City of Detroit, Ford Motor Co, General Motors Co, Stellantis NV and the Government of Canada for comment.