Canada hits back at US car tariffs with reciprocal measures

Canada says it has started imposing a 25% tariff on certain vehicle imports from the US, retaliating against a similar measure from its neighbour.

The tariffs – or import taxes – will be paid by Canadians who buy some automobiles or their parts from the US.

Confirming that the new taxes would apply after midnight on Wednesday, Canadian Finance Minister Francois-Philippe Champagne said his country was responding to “unwarranted and unreasonable” tariffs.

After returning to power, US President Donald Trump has unleashed a raft of these taxes – which apply globally and specifically aim at some of his top trading partners, including Canada. He claims they will address unfairness in global trade.

Canada was not directly hit by the new swathe of American tariffs – which also came into force at midnight – but Ottawa was already in a row with Washington over Trump’s pre-existing policies, which tax a range of items brought across the border.

“We’ll protect our workers, our businesses, and our economy,” Champagne wrote on X, as he confirmed the start of the retaliatory Canadian measures.

A factsheet from the government clarified that Canadian importers would be forced to pay a tax of 25% on certain automobiles or their parts:

Any fully-assembled vehicles arriving from the US that were not compliant with the CUSMA North American free-trade agreement

Any “non-Canadian and non-Mexican content” that formed part of a fully-assembled vehicle arriving from the US, even if it complied with CUSMA

The confirmation comes after Canadian Prime Minister Mark Carney – who is in an election fight – vowed a forceful response to Trump’s tariffs.

Trump has also enraged Canadians with statements about taking over the neighbouring country.

The Canadian tariffs were followed by retaliatory measures from China later the same day.

The Canadian car tariffs come after Trump’s import taxes of 25% on cars entering the US came into effect. Taxes on car parts are set to start next month.

These moves have been particularly painful for Canada, whose car industry is entwined with that of the US.

Along with China and Mexico, Canada had already been caught up in an earlier round of Trump tariffs, which were designed to pressurise those countries to stem the flow of illegal migrants and drugs into the US.

What emerged was a blanket tax of 25% paid by American importers for all goods from Canada – except those under the existing North American free trade agreement, and with lower rates for energy, potash, aluminium and steel.

By BBC News