Canada Strikes Back After United States Imposes Tariffs On Autos, Auto Parts

As Connecting the Dots reported last month, on March 26, President Donald Trump used his Section 232 trade powers to impose 25 percent tariffs on all imports of automobiles and auto parts into the United States, including products from North American trading partners. The penalties took effect April 2, 2025.

One week later, on April 9 at 12:01 a.m. EDT, the Canadian government imposed countermeasures in response to the U.S. tariffs. These penalties include:

• 25 percent tariffs on non-United States, Mexico, Canada Agreement (USMCA) compliant fully assembled vehicles imported into Canada from the United States.
• 25 percent tariffs on non-Canadian and non-Mexican content of USMCA compliant fully assembled vehicles imported into Canada from the United States.

In a press release, the Canadian government promised to implement a remission framework for auto producers that would incentivize production and investment in Canada, and help maintain Canadian jobs. (Details about this program have not yet been revealed.)

Canadian Minister of Finance François-Philippe Champagne also said the government has granted a special exemption from previous tariff countermeasures on U.S. consumer and household products to the residents of Campobello Island, New Brunswick. This special exemption is in recognition of the island’s unique situation, which is only accessible by road via the United States year-round.

The Canadian government also has requested World Trade Organization dispute consultations with the United States over the United States penalties on cars and car parts from Canada. Read more about that request at this link.