Canada hits back at US tariffs on the auto industry

The new Canadian tariffs apply to “fully assembled vehicles imported into Canada from the United States” that do not comply with the Canada-United States-Mexico Agreement (USMCA or CUSMA, as the Canadians call it). The new tariffs also apply to ‘non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the United States.’

That is one of the main differences compared to tariffs in the US: The latter placed tariffs on all cars not assembled in the US. Canada specifically targets one country, namely the United States, as the latter does not honour the above-mentioned free trade agreement USMCA. Mexico does, which is why they do not need to fear tariffs on cars or car parts in Canada.

The Canadian import duties apply to “Motor cars and other motor vehicles principally designed for the transport of persons” as well as “Motor vehicles for the transport of goods.”

“Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products,” Canadian Finance Minister François-Philippe Champagne said. “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.”

The goal is this clear: Canada is imposing the tariffs just to get the US to lift theirs. “These countermeasures will remain in place until the US eliminates its tariffs against the Canadian auto sector,” the Canadian government stated. In the US, the 25 per cent tariffs on all passenger vehicles and light trucks imported to the US were enacted earlier this month. Levies on car parts will follow next month. In response, Stellantis closed a plant in Canada for two weeks, for example, and Volkswagen halted imports from Mexico into the US.

international.gc.ca, canada.ca (Automotive Retaliation List)