PM Carney Imposes 25% Tariff on Non-CUSMA U.S. Vehicles in Response to Trump’s Trade Measures

Prime Minister Mark Carney has announced a 25 per cent tariff on all U.S.-made vehicles that do not comply with the Canada-United States-Mexico Agreement (CUSMA), escalating tensions in the ongoing trade dispute with the United States. The announcement came Thursday morning following a First Ministers’ meeting in Ottawa.

The move comes in direct response to U.S. President Donald Trump’s rollout of a long-promised reciprocal tariff regime on Wednesday. Although Canada had initially been spared under the CUSMA framework, several other U.S. tariffs remain in place, including levies on Canadian steel and aluminum that took effect on March 12.

Trump also implemented sweeping new tariffs at midnight on Wednesday, slapping a 25 per cent duty on all foreign-made automobiles. While these tariffs are framed as part of a broader national security effort linked to border security and the fentanyl crisis, the U.S. administration has yet to establish a clear mechanism to distinguish and exempt CUSMA-compliant components within imported vehicles.

In response, Carney said Canada will mirror the U.S. approach by imposing its own 25 per cent tariffs on:

• All U.S. vehicles that are not compliant with CUSMA
• Any non-Canadian content within CUSMA-compliant vehicles imported from the U.S.

However, the Canadian tariffs will not apply to:

• Auto parts, in order to preserve the benefits of the integrated North American manufacturing system
• Vehicles imported from Mexico

Carney added that the federal government is actively working with Canadian auto manufacturers to establish a framework that could allow certain vehicles to avoid the new tariffs under specific conditions.

This latest action builds on earlier retaliatory measures. Canada has already imposed 25 per cent tariffs on $30 billion worth of U.S. goods, including consumer products like orange juice, wine, and spirits, in response to previous U.S. tariffs. The federal government maintains that these tariffs will remain until all U.S. levies on Canadian goods are lifted.

Canada has also targeted American steel and aluminum with equivalent duties, bringing the total value of countermeasures to roughly $60 billion.

According to the Prime Minister’s Office, more than 67,000 U.S. vehicles imported into Canada last year, around 10 per cent of total auto imports ,were not compliant with CUSMA standards.

During Thursday’s press conference, Carney stressed that Canada must look beyond its southern neighbor and begin diversifying its trade partnerships.

He also reiterated his belief that the traditional Canada-U.S. relationship has fundamentally changed. “The relationship we once knew is over,” Carney said. “This trade war has redefined it, and we need to reset the overall relationship. While that’s a tragedy, it’s the new reality.”

Although Carney and Trump agreed to remain in contact in the coming weeks, no further talks between the two leaders are currently scheduled.