Canada has announced it will impose a 25% tax on US vehicles in response to new American tariffs on Canadian steel, aluminum, and cars, calling them “unjustified” and “misguided.” Prime Minister Mark Carney made the announcement shortly after US President Donald Trump revealed a wide range of new global tariffs.
Although Canada and Mexico were spared from additional new levies, existing 25% US tariffs on key Canadian exports remain — prompting a strong response from Ottawa.
Canada Responds With Targeted Tariffs
Prime Minister Carney made it clear that the new Canadian tariffs will:
- Apply only to non-compliant vehicles under the North American free trade agreement
- Not affect vehicle parts or content sourced from Mexico
- Support Canadian workers using funds collected from the tariffs
“If the US no longer wants to lead, Canada will,” Carney said during a press conference. He also promised relief measures for industries expected to face job losses, especially in manufacturing-heavy regions like Ontario.
Trade Tensions Add to Global Economic Worries
This trade battle comes at a time when the global economy is already struggling. Financial markets have lost trillions in value, and countries around the world are re-evaluating their trade relationships with the United States.
Carney said he had been in talks with Mexico’s President Claudia Sheinbaum and European leaders to build new trade alliances focused on fairness and shared benefit, aiming to move away from US dependency.
“In this new world, we need to look out for ourselves,” Carney said. “Because we are Canadian, we will always look out for each other.”
Politics Heat Up Ahead of Canadian Elections
Canada’s decision comes during a federal election campaign, and early signs suggest that Carney’s firm stance on trade is helping his Liberal Party gain support. Polls show they could secure a majority government if current momentum continues.
However, Conservative leader Pierre Poilievre has taken a different approach. He has pledged to:
- End the “tariff madness”
- Renegotiate the North American trade pact
- Remove federal taxes on vehicle purchases, potentially saving families thousands
Ontario Hit Hardest by Tariff Fallout
Ontario, Canada’s biggest manufacturing province, is expected to suffer the most from the trade tension. Already, a major car plant in Windsor has announced a two-week shutdown, affecting over 3,500 workers.
Ontario Premier Doug Ford said he supports Carney’s tough stance, calling it “strength through negotiation.” He added that the US tariffs are “totally unacceptable” and hurt hardworking Canadians.