Countries are beginning to retaliate against the Trump administration’s tariffs on foreign goods. China slapped an 84-percent tariff on US-made goods on Tuesday in response to tariffs levied against the country earlier in the morning. Now, Canada has announced tariffs of up to 25 percent on vehicles imported from America.
The counter-tariff will take effect Wednesday as of 12:01 a.m. EDT, according to Canada’s Department of Finance. The country is following through on a promise made to respond to Trump’s tariffs on all foreign-made cars, including those from Canada.
The 25-percent tariff will only apply to parts of the vehicle imported from the US that didn’t originate from Canada or Mexico, coinciding with rules under the United States-Mexico-Canada Agreement (USMCA). The tariff also applies to vehicles where manufacturing doesn’t comply with USMCA guidelines, according to The Globe and Mail.
That means most cars imported from the US to Canada will likely have a tariff less than 25 percent applied, as most cars built in North America use supply chains that travel through Canada, the US, and Mexico. Around 60 percent of vehicles sold in Canada are imported from the US. Canada is also America’s largest export market.
“Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the US on Canadian products,” Finance Minister François-Philippe Champagne said in a statement. ”The government is firmly committed to getting these US tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy and industry.”
The Department of Finance vowed to keep the tariff in place until the US eliminates its tariffs on Canada-built vehicles. For consumers, that’ll likely mean higher prices. Some brands have already begun increasing prices in response to tariffs, while others have paused US shipments altogether. And it’s only set to get worse from here.
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