Canada will impose matching 25 percent tariffs on vehicles imported from the United States, Carney announced.
Prime Minister Mark Carney says Canada will impose matching 25 percent tariffs on vehicles imported from the United States, in response to U.S. auto tariffs kicking in on April 3.
Carney made the announcement on April 3, a day after U.S. President Donald Trump unveiled his “reciprocal” tariffs plan for the world. Canada was left out of this regime as it’s already impacted by U.S. tariffs related to Trump’s border security and drug trafficking concerns, with exemptions applied to products covered under the United States-Mexico-Canada Agreement. Canada is also subject to 25 percent tariffs Trump had previously announced on all steel and aluminum imports.
“While it’s progress that further tariffs were not imposed on Canada yesterday, the president’s actions will reverberate here in Canada and across the world,” Carney said, adding that all sets of tariffs imposed under various premises are “unjustified, unwarranted, and in our judgment, misguided.”
Canada’s retaliatory tariffs will target vehicles imported from the United States that are not compliant with the USCMA free trade deal, as well as the non-Canadian content of USMCA-compliant vehicles.
The difference with the U.S. tariffs is that Canadian measures will not apply to auto parts nor vehicle content from Mexico, Carney said during a press conference in Ottawa. He added that the federal government is developing a framework for car manufacturers in Canada to get relief from funds collected from Canada’s counter-tariffs if they maintain their production and investments in the country.
Carney said the counter-tariffs are expected to collect approximately $8 billion in revenue, which will be distributed to impacted workers and companies.
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“We take these measures reluctantly, and we take them in ways that it’s intended and will cause maximum impact in the United States and minimum impact here in Canada,” Carney said.
Canada had already responded to other sets of U.S. tariffs by targeting nearly $60 billion worth of U.S. goods with levies, and Carney said these measures remain in place.
The prime minister said he had told Trump during their call on March 28 that Canada would respond to the auto tariffs. Trump has imposed tariffs in a bid to bring back car manufacturing jobs to the United States and shore up the country’s industrial base.
‘Best Deal’
With Canada being spared additional tariffs on April 2, Carney said it got the “best deal of a series of tough deals,” and that this indicates progress.
He cited as further progress the agreement he made with Trump last week to begin negotiations on the “overall economic security partnership” between Canada and the United States after the election.
Carney had said last week that Canada’s longstanding relationship with the United States, “based on deepening integration of our economies and tight security and military cooperation, is over.”
Asked by reporters to clarify these comments on April 3, Carney said the deepening integration around trade is over, but not around security and military cooperation.
“Our military and security relationship is still with the United States, [it’s] still our most important one without question, so I didn’t declare the end of that, and I’m not declaring the end of that,” he said.
Conservative Leader Pierre Poilievre visits Cancoil, a manufacturer of commercial refrigeration products, to hold a press conference in Kingston, Ont., on April 3, 2025. The Canadian Press/Sean Kilpatrick
“What I have emphasized, and my government has taken action on, is diversifying and reinforcing other aspects of our security partnership.”
Carney cited as examples a deal to procure an Australian over-the-horizon radar system, the review of the purchase of U.S.-made F-35 fighter jets, and his trips to France and the United Kingdom shortly after he became prime minister to deepen security cooperation.
Conservative Leader Pierre Poilievre disputed the idea there has been progress made with Trump during a campaign event in Kingston, Ont., on April 3.
“Unfortunately, Canada has not been spared. There is no progress, and there was nothing constructive or productive about Trump’s tariff announcement,” he said, noting the auto tariffs came into force on April 3.
Poilievre pledged to remove the GST on cars assembled in Canada to help the local auto industry.
There are less than a dozen vehicles assembled in Canada, including the Chevy Silverado, Honda Civic and CR-V, the Toyota RAV-4, and the Chrysler Pacifica.
Poilievre also promised the creation of a $3 billion fund to provide short-term credit lines and low-interest loans to businesses impacted by tariffs to keep workers on the payroll.
Liberal Leader Carney made a similar pledge on March 26, saying a new Liberal government would establish a $2 billion fund to help the auto industry.
The auto industry is deeply integrated between Canada and the United States, with a single component crossing the border multiple times before a vehicle is completed. The automotive sector is also Canada’s largest export sector by value after oil.
