Canada Goes Eye For Eye In Trump's Trade War
The Trump administration has officially implemented 25% tariffs on imports from Canada and Mexico, setting off a trade war that will absolutely scramble the automotive industry.
Canada has already responded with its own 25% tariffs, with American-made EVs potentially next on the list.
Key Points
- The Trump administration has imposed 25% tariffs on auto imports from Canada and Mexico, citing national security concerns.
- Canada has retaliated with its own 25% tariffs on U.S. products, including motorcycles and auto parts.
- The tariffs are expected to increase vehicle prices, with crossover SUVs costing $4,000 more and EVs facing up to $12,000 in added costs.
- Automakers including Ford, GM, Stellantis, Toyota, and Volkswagen are among those most affected, as many popular vehicles are assembled in Canada and Mexico.
The U.S. government justified the tariffs under the International Emergency Economic Powers Act, citing national security concerns, including drug trafficking and illegal immigration. For months, the automotive industry—which relies heavily on cross-border manufacturing and supply chains, if you hadn't heard—has been preparing and praying contingency plans wouldn't be necessary.
Automakers like Ford, GM, Stellantis, Toyota, and Volkswagen are expected to be hit hardest. Many of their most popular models—including the Ford Maverick, Chevy Silverado, Honda Civic, and Toyota Tacoma—are assembled in Canada and Mexico.
The tariffs could lead to significant price increases, production delays, or even the most extreme of circumstances, model discontinuation.
In response, the Canadian government immediately imposed its own 25% tariffs on a list of over 1,200 American products valued at USD 20.7 billion ($30 billion CAD). The list includes motorcycles and automotive parts, along with steel and aluminum. Ontario Premier Doug Ford even announced 25% tariffs on electricity exports to three U.S. states.
If the U.S. tariffs remain in place, Canada is prepared to escalate the retaliation to $106.7 billion USD ($155 billion CAD) worth of American goods, with electric vehicles, trucks, and buses specifically targeted in the next wave. Prime Minister Justin Trudeau's government has also threatened a 100% tariff on Tesla vehicles.
Compared to Canada’s immediate retaliation, Mexico has taken a more measured approach. President Claudia Sheinbaum Pardo has stated that Mexico will announce its countermeasures on March 9.
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, been over the wall during the Rolex 24, and worked in the intense world of IndyCar.
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