World
India
Canada is hitting back in the latest round of the US-Canada trade war, announcing new tariffs on American-made vehicles. The move comes as a response to US President Donald Trump’s recent trade measures targeting goods that fall outside the USMCA agreement.
Just after midnight on Wednesday, the Canadian government will begin enforcing a 25% tariff on vehicles imported from the United States that don’t align with the North American trade deal signed in 2019.
New Leadership, New Measures
Prime Minister Mark Carney, who took over from Justin Trudeau last month, confirmed the move during a Thursday announcement. He outlined limited but targeted countermeasures aimed specifically at non-compliant US auto imports.
The tariffs will not affect auto parts or any vehicle content originating from Mexico.
Carney added that the government would direct the projected C$8 billion collected from the tariffs toward supporting auto workers and others impacted by the US policies.
“The new tariffs would not apply to auto parts and would not affect vehicle content from Mexico,” Carney stated.
In addition, residents of Campobello Island in New Brunswick will receive a special exemption from the tariffs under a new framework also aimed at boosting domestic investment and production in the auto sector.
These measures come in response to a series of US-imposed tariffs. On March 6, Trump placed 25% tariffs on non-USMCA-compliant goods. A week later, on March 12, he expanded the scope by slapping duties on steel and aluminum. Then on Thursday, the US extended the 25% import tax to autos—though Canada was spared from broader global tariffs.
The First Wave of Canadian Retaliation
Before Carney’s announcement, Trudeau had already initiated a first round of retaliatory tariffs back on March 6.
That round included 25% duties on C$30 billion (approximately $20.92 billion USD) worth of US imports. It was part of a larger plan to retaliate against up to C$155 billion in American goods—though the remaining C$125 billion in tariffs has yet to be enforced.
The initial batch targeted 1,256 products. These ranged from food and beverages like orange juice, peanut butter, coffee, wine, beer, and spirits, to consumer goods such as cosmetics, apparel, footwear, appliances, and motorcycles.
In terms of trade value:
- Cosmetics and body care made up C$3.5 billion.
- Appliances and household items stood at C$3.4 billion.
- Pulp and paper came in at C$3 billion.
- Plastics totaled C$1.8 billion.
Tariffs on Steel, Aluminum, and Beyond
As of March 13, Canada levied an additional 25% tariff on another C$29.8 billion worth of US goods. These will remain until the US removes its tariffs on Canadian steel and aluminum.
The newly affected items include everything from household goods like candles and kitchenware to luxury items such as jewellery, gold, and platinum.
On top of tariff-based retaliation, Canada is also weighing non-tariff strategies.
Trudeau previously suggested exploring options involving energy, critical minerals, and procurement partnerships.
Asked about such alternatives on March 25, Carney responded, “They are options.”
Some provinces are already taking steps. US liquor products have been pulled from store shelves in various regions.
Ontario Premier Doug Ford declared that US-based firms would be banned from bidding on government procurement contracts.
Ontario also canceled a C$100 million deal with Starlink, a company owned by Trump supporter Elon Musk.
Additionally, Tesla has been frozen out of all EV rebate programs in Canada. Toronto has stopped offering incentives for Tesla vehicles used as taxis or rideshares due to ongoing trade tensions.
ALSO READ: Trump Imposes 104% Tariffs On China, Effective Tomorrow
