Canada responded to Donald Trump's 25% tariffs on Canadian cars, steel, and aluminum by imposing its own 25% tariffs on imported American cars. This decision came after Canada had initially avoided the broader 10% tariffs imposed by the US on several trade partners.
Canadian Prime Minister Mark Carney, who succeeded Justin Trudeau, announced the retaliatory tariffs after meeting with provincial premiers. He emphasized that these measures aim to maximize impact on the US while minimizing harm to Canada, excluding automotive components to protect domestic manufacturers. Carney also acknowledged the potential for a difficult trade war and the risk of economic recession in Canada, should the US economy suffer.
The new tariffs are estimated to generate $8 billion, which will be directed towards Canadian automotive workers and affected businesses. Immediate consequences included Stellantis' temporary closure of its Windsor plant (near Detroit) for two weeks, affecting 900 workers and impacting production of Chrysler Pacifica, Voyager, and Dodge Charger Daytona. Stellantis also suspended operations at five US plants and temporarily halted a Mexican assembly unit.
The tariffs do not affect cars imported under the USMCA (United States-Mexico-Canada Agreement), which provides some exemption to both Canada and Mexico.