Canada enforces 25% tariffs on non-CUSMA compliant auto imports from the US

On April 8, 2025, the Canadian government confirmed that retaliatory measures against US auto tariffs will be enforced from April 9, as the trade dispute between the United States, Canada, and Mexico intensifies. 

The Canadian Department of Finance announced the countermeasures earlier this week, and they target non-Canada-U.S.-Mexico Agreement (CUSMA) compliant vehicles imported from the US with a 25% tariff. “These countermeasures will remain in place until the U.S. eliminates its tariffs against the Canadian auto sector,” it said in a statement.

Canada announces countermeasures against auto imports from the United States

On March 4, 2025, the US implemented a series of tariffs on Canada: 25% tariff on Canadian goods and a 10% tariff on energy and potash exports. These tariffs were later adjusted to apply only to non-CUSMA-compliant products. On March 12, a further 25% was imposed on Canadian steel and aluminum products. In a move further escalating trade tensions, a 25% tariff on Canadian automobiles was enacted on April 3, directly impacting the auto industry and the over 500,000 Canadians it employs nationwide.

The Canadian Minister of Finance, the Honorable François-Philippe Champagne said that Canada’s countermeasures to the unjustified tariffs imposed by the US on the Canadian auto industry would be enforced at 12:01 a.m. EDT on April 9, 2025. 

The Canadian Minister of International Trade and Intergovernmental Affairs, the Honorable Dominic LeBlanc, said “Canada is being needlessly and unfairly targeted by these tariffs, and the US’s decision leaves us with no choice but to respond to protect Canadian interests, workers and businesses.”

The countermeasures include: 25% tariffs on non-CUSMA-compliant fully assembled vehicles imported into Canada from the United States, and 25% tariffs on non-Canadian and non-Mexican content of CUSMA-compliant fully assembled vehicles imported into Canada from the United States. This means if a vehicle is compliant with CUSMA, the parts which are not from Canada or Mexico will be taxed.

The current scope of tariffs is on goods worth over $30 billion. However, the Canadian government says it will increase its scope to about $155 billion worth of imported goods if the US tariffs remain. “Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products. The government is firmly committed to getting these U.S. tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy and industry,” Minister Champagne said.

China and EU response to Trump tariffs

On April 4, 2025, China announced that it would impose a 34% tariff on all US imports starting from April 10. In response, Trump asked China to remove the tariff or be hit with another 50% tariff, bringing the total to about 104%. The Chinese embassy in the US said China will not back down. “The U.S. tariff escalation threat against China compounds its mistake and further exposes its nature of blackmail, which China will never accept,” the embassy posted on X, adding that “China will fight till the end if the U.S. side is bent on going down the wrong path.”

On March 12, 2025, the EU, in retaliation against US tariffs on steel and aluminum reinstated previously turned-off tariffs against bourbon and motorcycles from the American side, with effect from April 1. In addition, another €18 billion worth of U.S. goods is subject to additional tariffs proposed for implementation by mid-April.

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