- Canada just responded to the tariffs by Trump’s administration with a 25% percent tariff bolted on the non-compliant USMCA vehicles sourced from the United States.
- Agenda for compliant USMCA vehicles: The 25% tariff will only be applied to the parts of outsourced cars that don’t originate from Canada or Mexico.
- The new tariffs came into force at 12:01 a.m. ET on April 9, and Canadian officials vowed to maintain them until the U.S. lifted its tariffs on Canadian imports.
Canada has imposed a 25% counter-tariff on U.S. vehicles. Effective from April 9 at 12:01 a.m. ET, against the Trump administration’s tariffs on the auto industry. The move led the U.S. to introduce a 25% tariff on Canadian-manufactured vehicles, which escalated the trade tension.
While the Canadian tariff applies entirely to the non-USA-compliant vehicles, in contrast, the USMCA-complaint cars only experience a tariff on their parts not sourced from Canada or Mexico. Which in return offers some relief for cross-border manufacturers.
Finance Minister Francois-Philippe Champagne stressed Canada’s commitment to defending its workers, business, and automotive industry, calling the U.S. tariffs “unwanted and unreasonable”. While on the other hand, the U.S. has paused its most reciprocal tariffs.
The 25% tariff stands in its place, which further strains the trade relations. The counter-tariffs will be continued until the U.S. steps back on its tariffs on Canadian vehicles, leaving the auto industry bracing for higher prices in the absence of a resolution.
