Canada Just Increased the Price of US-Built Cars by 25% Overnight | Carscoops

      Industry leaders have called on Canadian officials to refrain from penalizing cross-border automotive collaborations.

      

       6 hours ago

      

       by Stephen Rivers

      

      

      

      Canada has implemented a 25 percent tariff on American-made cars that breach USMCA trade regulations.

      Officials aim to safeguard domestic automotive jobs while applying pressure on U.S. trade negotiators.

      Vehicles and parts manufactured in Mexico are excluded from Canada’s counter-tariff for strategic purposes.

      Trade tensions between the U.S. and Canada have escalated once again. As of today, Canada has enacted a 25 percent tariff on cars imported from the United States, representing a considerable escalation in the ongoing economic conflict between the two nations. However, this is not merely a retaliatory measure; Canada’s strategy is more targeted, designed to convey a message while minimizing disruption to the entire automotive industry.

      Finance Minister François-Philippe Champagne stated, “Canada continues to respond decisively to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products. The government is firmly dedicated to removing these U.S. tariffs as swiftly as possible and will defend Canada’s workers, businesses, economy, and industry.”

      Strategic Tariffs Rather Than Broad Retaliation

      Canada’s strategy to have these tariffs lifted involves imposing its own. The new 25 percent tariff will specifically apply to cars from the U.S. However, this approach is more nuanced than a general tariff. It particularly targets vehicles that do not conform to the Canada-U.S.-Mexico agreement. Furthermore, compliant vehicles will still incur the tariff if they contain parts sourced from outside Mexico or Canada.

      Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, conveyed to CNBC on Tuesday, “What we advised the prime minister was to keep parts out of this for now. We also stressed that if counter tariffs are to be implemented, they should specifically target American goods. We want to avoid inadvertently harming our partners in Mexico. No one wants this, but Canada has to react.”

      This development seems somewhat ironic given that Trump himself was involved in negotiating the USMCA deal, which he now opposes. Canada is appearing to provide some relief for certain automakers by developing a ‘remission framework’ that might ease the tariff burden for Canadian production. Interestingly, Canada’s labor union holds a vastly different stance compared to the UAW in the U.S. regarding the entire situation.

      Unifor National President Lana Payne stated, “There is absolutely no justification for the United States to impose tariffs on Canadian vehicles. Canada did not instigate this trade war, but we have no option but to stand our ground. We refuse to relent and compromise Canada’s automotive jobs and industry on Donald Trump’s altar.”

      Currently, the duration and repercussions of this trade dispute are uncertain. Nevertheless, it is clear that Canada is signaling its unwillingness to remain passive while tariffs target its automotive sector, and it is ready to retaliate effectively.