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Mark Carney has announced that Canada will hit back against the US with a tariff on vehicles made south of the border.
The prime minister said that, matching US President Donald Trump’s levy in the opposite direction, Canada will now hit US-made cars that do not comply with the CUSMA trade deal with a 25 per cent import tax.
Auto parts, however, will be exempted from the Canadian version of the tariff, Carney explained. Mexican-made vehicles will also be exempted.
He added that his government is also “developing a framework” to grant carmakers “relief” from the tariff so long as they maintain their production and investment in Canada.
In response to U.S. auto tariffs, PM Mark Carney announces a matching 25% tariff on all imported American vehicles not compliant with the CUSMA trade agreement, pledging support for Canada’s auto industry and reiterating a plan to build a "made-in-Canada auto sector."#cdnpoli pic.twitter.com/fvSRe4dkHJ
— CPAC (@CPAC_TV) April 3, 2025
Speaking in Ottawa Thursday, the PM claimed the levy could raise as much as $8 billion. He pledged that all the money raised from the tax, which would be paid by Canadian importers, would be used to support workers and companies affected by the US tariff.
Referring to the Trump government, he said: “Although their policy will hurt American families, until that pain becomes impossible to ignore, I do not believe they will change direction.”
He said he didn’t want to “give false hope,” but that he thinks the Americans “should eventually change course” when the tariffs announced on Wednesday cause “damage to their own people.”
"Although their policy will hurt American families, until that pain becomes impossible to ignore, I do not believe they will change direction,” he said, adding that “the road to that point may indeed be long and it will be hard on Canadians.”
Trump said yesterday – which he labelled ”Liberation Day” – that he will start tariffing nations around the world at “reciprocal” rates.
MAKE AMERICA WEALTHY AGAIN! 💰
— The White House (@WhiteHouse) April 2, 2025
"This is one of the most important days... in American history; it's our Declaration of Economic Independence. For years, hard-working American citizens were forced to sit on the sidelines... But now it's our time to prosper." – @POTUS 🇺🇸 pic.twitter.com/mKsAKIOtsp
They are not in fact reciprocal, but based on the US’s trade balance with each country. All countries have been subject to a minimum 10 per cent tariff.
Canada is not affected by that tariff system, though all trade that falls outside the CUSMA deal is subject to a 25 per cent tariff.
Canada has also been hit by the US’s 25 per cent tariff on steel and aluminum imports.
Tory Leader Pierre Poilievre, meanwhile, said today he’d take GST off new Canadian-made cars if he wins the election April 28.
He said it was crucial to “stand up to Trump from a position of strength, and never be in a position of weakness again.”
The NDP’s Jagmeet Singh said he wanted to see “Canada Victory Bonds” issued to tap into patriotic sentiment and raise revenue for infrastructure spending.