Auto wars begin: Canada slaps 25% tariffs on US cars, spares supply chains after Trump’s trade war

Following US President Donald Trump's announcement of reciprocal tariffs, Canada Prime Minister Mark Carmey said that the country will impose a 25 per cent tariff on all US vehicle imports that do not comply with the free trade agreement.

The Canadian PM further said that the revenue generated from these tariffs would be directed toward supporting the country's auto workers and the industry.



Sharing a post on X on Thursday (local time), Carney said, "In response to President Trump's tariffs on our auto sector, Canada will impose a 25% tariff on all US vehicle imports that do not comply with our free trade agreement. All revenues from these tariffs will be used to support our Canadian auto workers and their industry."

"For US vehicles that comply with The Canada-United States-Mexico Agreement (CUSMA), Canada will also impose a 25% tariff on the content which is not from either Canada or Mexico. The revenue from those tariffs will also go directly to supporting Canada's auto workers and their industry," the post added.

Carney further said that Canada's tariffs would differ from those imposed by the US and stated that the tariffs, unlike President Trump's, will not affect auto parts.

"Our tariffs, unlike President Trump's, will not affect auto parts because we know the benefits of our supply chain. Canada will also develop a support framework for auto producers that incentivises production and investment in Canada," Carney wrote on X.

Following the announcement of reciprocal tariffs, Carmey called the United States' tariffs, particularly on automobiles, "unjust" and stated that the "global economy is fundamentally different today than yesterday."

"The global economy is fundamentally different today than yesterday. We must respond with purpose and force and take every step to protect Canadian workers and businesses against the unjust tariffs imposed by the United States, including on automobiles. We will never cease to defend the interests of Canadians, safeguard our workers and businesses, and continue our pursuit to build the strongest economy in the G7," Carney said.

Notably, on March 4, US tariffs of 25% on Canadian goods and 10% on energy and potash exports from Canada to the US came into effect. On March 12, the US imposed tariffs of 25% on Canadian steel and aluminum products.

On April 3, US tariffs of 25% on Canadian automobiles came into effect, targeting the auto industry and the more than 500,000 Canadians this industry supports across the country.

The US also intends to apply 25% tariffs on certain automobile parts before May 3.

Amid worldwide criticism, Trump declared a national economic emergency and announced tariffs of at least 10 per cent across all countries, with rates even higher for 60 countries.

The tariff plan imposed high levies on many countries, including 26 per cent on India, 49 per cent on Cambodia, 46 per cent on Vietnam, 34 per cent on China, 24 per cent tariff on Japan, 20 per cent on the EU, US media reported, noting that more than 180 countries and regions will face tariffs.

CNN reported on Thursday that US stocks tumbled in after-hours trading as President Donald Trump delivered remarks at the Rose Garden and unveiled sweeping tariffs. All eyes will now be on the Asian indices when they open for trading.