Canada Responds to U.S. Measures with 25% Tariffs on U.S.-Sourced Cars

Canadian officials promise to keep the new tariffs in place until the United States removes its tariffs on cars built in Canada.By Jack FitzgeraldUpdated: Apr 10, 2025Save Article

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• Canada has responded to the Trump administration’s tariffs with a 25 percent tariff on non-compliant USMCA vehicles imported from the United States.
• For compliant USMCA vehicles, the 25 percent tariff will only be applied to the parts of imported cars that don’t originate from Canada or Mexico.
• The new tariffs officially went into effect at 12:01 a.m. ET on April 9, with Canadian officials promising to keep them in place until the U.S. removes its tariffs on Canada.

For more information on the evolving auto tariff situation, click here to read Car and Driver’s comprehensive coverage.

UPDATE 4/9/25, 2:40 p.m. ET: The Trump administration has announced it’s placing a 90-day pause on most of its so-called reciprocal tariffs while still implementing a 10 percent base tariff on most goods; however, the pause doesn’t apply to the 25 percent auto tariffs.

Canada has responded to the Trump administration’s 25 percent tariffs with an equal counter-tariff targeting cars imported from the United States. The Canadian government had previously announced this response but had not given a start date. The counter-tariffs went into effect at 12:01 a.m. ET on Wednesday, April 9, Canada’s Department of Finance announced.

For cars that comply with the United-States-Mexico-Canada Agreement (USMCA), the new 25 percent levy will only be applied to components of imported cars that don’t originate from Canada or Mexico. For non-USMCA compliant cars, the full 25 percent tariff will be applied for cars imported to Canada from the United States. The distinction means that most USMCA cars are likely to face a tariff well below the 25 percent ceiling.

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“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 in a statement. “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 Canadian Department of Finance announced that the countermeasure will remain in effect until the U.S. removes its tariffs targeted at cars sourced from Canada. With no sign of either country backing down, that will mean rising prices for consumers in both countries.