Trucking gets caught in the crossfire as Ottawa and Washington stop talking

Cross-border carriers spent last week believing a deal was close. By Monday they were watching their share prices fall.

Talks between the US and Canada collapsed late on Friday, and among the sticking points, according to reporting from Bloomberg, Reuters and Politico, were tariffs on medium- and heavy-duty vehicles. Negotiators had been working toward cutting the standard auto tariff to 15 per cent from 25; Canada wanted that relief extended to Class 3 through 8 trucks and did not get it. On Saturday the White House imposed 50 per cent tariffs on roughly $20 billion of Canadian exports. Prime Minister Mark Carney said the two countries were at war over trade and promised dollar-for-dollar retaliation from 8 September.

Then Monday. Trump posted that from 1 January tariffs on all Canadian cars, trucks large and small, automotive parts and steel would go to 50 per cent, accusing Ottawa of years of ripping off American farmers. It was not immediately clear whether large trucks in that formulation captures Class 8 commercial vehicles, which already sit under a separate 25 per cent Section 232 tariff with carve-outs for USMCA-compliant US content. Medium- and heavy-duty vehicles were explicitly excluded from Saturday's measures.

Investors did not wait for the fine print. Trucking stocks slid on Monday, with J.B. Hunt down 5.1 per cent, FedEx Freight 4.5 per cent, Landstar 4.1 per cent and Old Dominion 2.4 per cent, on expectations that cross-border volumes will shrink.

The Canadian Trucking Alliance warned that the damage runs in both directions. Fewer southbound Canadian loads means fewer Canadian trucks sitting in the US available to take American freight north, an equipment imbalance that makes the whole lane harder and dearer to serve. The association also argued that trucking is routinely left out of government support packages aimed at tariff-hit industries, despite absorbing the consequences whenever customers cut production.

The timing is awkward. Spot rates have cooled since the 4 July peak, with dry van posting a seventh straight weekly decline in the week to 21 August, but they remain roughly 34 to 38 per cent above last year on tight capacity. Diesel is above $5 a gallon. Carriers have finally regained pricing power after a three-year downcycle. A shrinking freight base is not how they wanted to keep it.