White House Announces 25% Tariff on Canadian-Made Vehicles

United States President Donald Trump announced today that a 25 per cent tariff on all vehicles made outside of the country will go into effect at 00:01 on April 3, 2025.

Although the automotive levy will affect Canadian-made vehicles, wider-ranging tariffs on Canadian goods had not been specified at time of writing. However, Trump said the U.S. will apply “a minimum baseline tariff of 10 per cent” on all goods entering the U.S., the CBC reports.

Some countries will have it worse, though. What Trump referred to as reciprocal tariffs of varying sizes were officially announced against China, the EU, Vietnam, Taiwan, Japan India, South Korea, Thailand, Switzerland, Indonesia, Malaysia and Cambodia, South Africa, Brazil, Bangladesh, and the United Kingdom. These varied from between 20 to 46 per cent.

Canada is receiving support from Democrats in the U.S. Senate, who pushed forward a resolution to block tariffs against Canada, The Toronto Star reports. Sen. Tim Kaine will force a vote on Republicans’ use of the International Economic Emergency Powers Act to declare an emergency over the alleged flow of fentanyl over the border.

“The president has justified the imposition of these tariffs on, in my view, a made-up emergency,” Sen. Kaine this week.

However, the measure is unlikely to stop Trump, nor will it stop auto tariffs. In Canada, the decision will impact Ford, General Motors, Honda, Toyota, and Stellantis, all of which assemble vehicles in Ontario. In addition, the blanket 10 per cent tariff on foreign made goods will likely impact parts makers, who have warned that large levies could drive up the prices of new vehicles significantly, and quickly lead to the closure of plants.

Canada’s response to the tariffs had not been announced at time of writing, but Prime Minister Mark Carney decided to pause his election campaign in order to prepare for today’s announcement, per the CBC.

The automotive industry is preaching caution in the wake of this announcement, according to David Adams, the president and CEO of Global Automakers of Canada, whose members include BMW, Honda, VW, and more.

“At a time when automakers need certainty more than ever, we urge governments at all levels to consult with industry and think carefully about how to respond effectively to these unjustified tariffs, focusing on stability and maintaining competitiveness while minimizing unintended consequences,” said Adams.