Canada Strikes Back with Countermeasures After U.S. Imposes New Auto Tariffs

OTTAWA — Prime Minister Mark Carney has announced sweeping countermeasures in response to the United States’ newly imposed tariffs on Canadian automobile exports, escalating an ongoing trade dispute that threatens to reshape North American commerce.

The move comes just one day after the U.S. administration revealed a slate of new tariffs that Canada has denounced as “unwarranted and unjustified.” The latest duties target fully assembled vehicles imported from Canada and compound earlier tariffs on steel and aluminum that remain in effect.

“These tariffs will do harm to American workers and businesses, but Canada will also be impacted,” a government statement read. “Every Canadian [will feel] the effects.”

In retaliation, Canada will impose 25 per cent tariffs on:

• All non-CUSMA compliant fully assembled vehicles from the United States, and

• The non-Canadian and non-Mexican content of CUSMA-compliant vehicles assembled in the U.S.

In addition, the federal government intends to introduce a new policy framework aimed at incentivizing vehicle production and investment within Canada.

“All revenue generated by these new tariffs will be reinvested directly into supporting Canadian auto workers,” the government confirmed.

Economic Support Measures for Workers and Businesses

Beyond tariffs, Canada is also bolstering its domestic economic response:

• The one-week Employment Insurance (EI) waiting period is being temporarily waived.

• Severance pay rules are being relaxed for six months to ease access to EI.

• Regional unemployment thresholds are being lowered to expand eligibility.

• Corporate income tax and GST/HST payments due from April 2 are deferred until June 30, 2025, freeing up to $40 billion in liquidity.

• A new business financing facility is being deployed, alongside enhanced funding for regional development agencies.

In a strongly worded statement, Prime Minister Carney described the situation as a turning point for global trade.

“The global economy is fundamentally different today than yesterday,” he said. “We must respond with purpose and force and take every step to protect Canadian workers and businesses… We will never cease to defend the interests of Canadians.”

The escalating tariffs mark the most serious trade rift between Canada and the U.S. since the early NAFTA disputes and come amid broader uncertainty in international trade policy. Canada’s response is expected to reverberate through the automotive sector and could set a precedent for future trade conflicts between the two countries.

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