As talks to re-negotiate NAFTA have stalled, the president of the United States escalated his rhetoric against Canada, formerly a nation regarded as America’s closest ally. Speaking in North Dakota, Trump raised the spectre of a tax on cars which he said could devastate the Canadian economy.

“Actually, on some countries, including Canada, a tax on cars would be the ruination of the country,” Trump warned. “That’s how big it is. It’d be the ruination of the country. Now, they’ve taken advantage of us for many decades. We can’t let this happen anymore. We have a country to run.”

As Daniel Dale of The Toronto Star reports, “Canadian economists do not think U.S. auto tariffs would ‘ruin’ Canada, but they have predicted a major economic hit. A TD Economics analysis in June forecast a job loss of 160,000, almost all of them in Ontario. Scotiabank said the tariffs could reduce Canadian growth by more than a quarter.”

Yet to date, Trump’s threats have not been effective in getting Canada to cave in major points of contention on negotiations, such as the regulation of the dairy industry and protection of cultural autonomy. One reason Canada seems to discount the threats is that they are hard to implement without hurting the United States itself. The intensified trade war that Trump threatens could not occur without disrupting North America’s auto manufacturing supply chain. For that reason, the idea of a tax on Canadian cars is opposed by every major player in the American automotive industry, from carmakers to dealers.

