President Trump’s threatened 50% tariffs on Canadian vehicles and parts could weaken an already fragile US economy, Oxford Economics said after US-Canada trade talks broke down. The duties, scheduled for Jan. 1, 2027, could lift the overall US effective tariff rate to 10.1% or 10.4%, depending on exemptions for USMCA (the United States-Mexico-Canada trade agreement) compliance. Canada has vowed to respond dollar for dollar and announced tariffs of as high as 50% on hundreds of US products. Oxford estimates the retaliation-driven escalation could reduce US GDP growth by 0.1 percentage point next year. The report also warns of higher inflation, squeezed automaker margins and disproportionate harm to Michigan, Ohio and Indiana, while the post-2026 midterm timing could leave trade policy more volatile during the final two years of Trump’s second term.