3 April: Prime Minister Mark Carney has announced that Canada will impose 25% counter-tariffs on non-CUSMA-compliant vehicles imported from the United States, as well as on the non-Canadian content of vehicles that otherwise qualify under the North American free trade agreement.
This move comes as a direct response to U.S. President Donald Trump’s latest wave of tariffs, which have shaken the global economy and put additional pressure on Canada’s auto sector. Speaking in Ottawa after a First Ministers’ meeting, Carney described the American tariffs as “unjustified, unwarranted, and misguided.”
Carney temporarily paused his federal election campaign to address the escalating trade crisis, which now includes U.S. tariffs of 25% on foreign-made vehicles and duties on Canadian steel, aluminum, and energy exports. While Canada is currently exempt from the broader reciprocal tariff package due to the Canada-U.S.-Mexico Agreement (CUSMA), Canadian goods are still subject to other U.S. levies.
To match the pressure, Carney said Canada’s own 25% tariffs will target American vehicles that do not meet CUSMA standards and any U.S.-made components in vehicles assembled in compliance with CUSMA. However, these new tariffs will not apply to auto parts or vehicles imported from Mexico.
The Prime Minister emphasized that the revenue generated — potentially reaching $8 billion — will be used to directly support Canadian auto workers and affected manufacturers. “We’re taking targeted action that hits hard in the U.S. and minimizes harm at home,” Carney said.
Canada has already imposed a separate set of retaliatory tariffs on $30 billion worth of U.S. goods, including aluminum, steel, orange juice, and liquor. These will remain in place until all American duties on Canadian products are lifted.
Carney also called for a broader “reset” in the Canada-U.S. relationship, noting that while Canada has the “best of the bad deals,” the foundation of the bilateral partnership has changed. “We need to expand our trade network and work with like-minded global partners,” he said, adding, “If the U.S. doesn’t want to lead, Canada will.”
The announcement drew cross-party reactions. Ontario Premier Doug Ford praised the federal response as “fair and measured,” while also pushing for a unified front among provinces. “We’ve got the best of a bad deal,” he said, acknowledging the importance of national solidarity in responding to U.S. actions.
Conservative Leader Pierre Poilievre criticized Trump’s tariffs but proposed economic relief through the removal of federal sales tax on Canadian-made vehicles and a new $3 billion fund to help affected businesses retain workers.
Meanwhile, NDP Leader Jagmeet Singh proposed the reintroduction of Victory Bonds, allowing Canadians to invest directly in national infrastructure development during this economic crisis. “This is our trade war moment — we must respond boldly,” Singh said, likening the current climate to wartime efforts.
Carney confirmed that while there are no immediate talks scheduled with President Trump, communication lines remain open. In the meantime, Canada is preparing for a prolonged trade confrontation — one that may redefine its place in the global economic order.
