Canada’s finance minister François-Philippe Champagne confirmed on 8 April 2025 that Canada’s new countermeasures, announced on 2 April 2025, in response to the unjustified tariffs imposed by the US on the Canadian auto industry came into force on 9 April 2025.

“Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the US on Canadian products. The government is firmly committed to getting these US tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy and industry, ” François-Philippe Champagne said. 

The Prime Minister of Canada, Mark Carney, announced new countermeasures to protect Canadian workers and businesses and defend Canada’s economy. These countermeasures include:

  • 25% tariffs on non-CUSMA compliant fully assembled vehicles imported into Canada from the US.
  • 25% tariffs on non-Canadian and non-Mexican content of CUSMA-compliant, fully assembled vehicles imported into Canada from the US.
  • Canada’s intention is to develop a framework for auto producers that incentivises production and investment in Canada.

A remission framework for auto producers that incentivises production and investment in Canada and helps maintain Canadian jobs will also be implemented. Further details of this framework will be announced shortly.

Minister Champagne also announced that the government has granted the residents of Campobello Island, New Brunswick, a special exemption from previous tariff countermeasures on US consumer and household products. This special exemption recognises the island’s unique situation: it is only accessible by road via the United States year-round.

Earlier, on 5 March 2025, Canada’s former Prime Minister Justin Trudeau announced that Canada would implement 25% tariffs on CAD 155 billion of American products following US President Donald Trump’s new 25% tariffs on imports from Canada.

However,  the same day, Trump decided to exempt automakers from his 25% tariffs on Canada and Mexico for one month if they follow existing free trade rules after discussions with the three largest US automakers – Stellantis, Ford, and General Motors.

Background

  • On 4 March 2025, US tariffs of 25% on Canadian goods and 10% on energy and potash exports from Canada to the US came into effect. The U.S. subsequently limited these tariffs to non-CUSMA compliant goods.
  • On 12 March 2025, the US imposed tariffs of 25% on Canadian steel and aluminum products.
  • On 3 April 2025, 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 on 3 May 2025. Under the US tariffs, certain exclusions linked to US content may be available, specifically the application of the 25% tariff only to the value of the non-US content in automobiles and auto parts that qualify for preferential tariff treatment under CUSMA.
  • Canada has responded to the US imposition of tariffs on Canadian goods by introducing a suite of countermeasures designed to compel the US to remove the tariffs as soon as possible. These countermeasures include:
    • Imposing tariffs of 25% on CAD 30 billion in goods imported from the US, effective 4 March 2025.
    • Holding a public comment period on potential counter tariffs on additional imports from the US.
    • Imposing, as of 13 March 2025, 25% reciprocal tariffs on a list of steel products worth CAD 12.6 billion and aluminum products worth CAD 3 billion, as well as additional imported U.S. goods worth CAD 14.2 billion, for a total of CAD 29.8 billion.
    • Imposing, as of 9 April 2025, 25% tariffs on non-CUSMA compliant US-made vehicles and on the non-Canadian and non-Mexican content of CUSMA compliant US-made vehicles. Vehicle imports from the US totalled CAD 35.6 billion in 2024.