The Canadian government is moving forward with its promised countermeasures against the United States in response to recently imposed tariffs on the Canadian auto industry. The Minister of Finance, François-Philippe Champagne, confirmed on April 8 that the new tariffs come into effect at 12:01 a.m. EDT on April 9.

This action follows the Prime Minister's announcement on April 3 about the country’s firm stance against what it deems "unjustified" tariffs from its southern neighbor. The countermeasures specifically target the automotive sector and include:

• A 25% tariff on non-Canada-U.S.-Mexico Agreement (CUSMA) compliant fully assembled vehicles imported into Canada from the United States. This measure aims to address vehicles that do not meet the established rules of origin under the trade agreement.

• A 25% tariff on the non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the United States. This targets vehicles that, while technically CUSMA compliant, still contain a significant amount of materials and components from outside the North American trade bloc.

In a statement released today, Minister Champagne underscored the government's resolve, saying “Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products. The government is firmly committed to getting these U.S. tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy and industry.”

The list of vehicles attracting 25% tariffs are as following-

I.  All Passenger Vehicles, including station wagons and racing cars

II. Hybrid Electric Vehicles (HEV - Not Plug-in)

III. Plug-in Hybrid Electric Vehicles (PHEV)

IV. Battery Electric Vehicles (BEV)

V. Goods Transport Vehicles

VI. Vehicles with Compression-Ignition Internal Combustion Piston Engine (Diesel or Semi-Diesel)

VII.Vehicles with Spark-Ignition Internal Combustion Piston Engine (Petrol)

VIII.Hybrid Electric Vehicles (HEV - Not Plug-in)

IX. Battery Electric Vehicles (BEV)

The list groups the tariff lines based on the fundamental type of vehicle (passenger or goods) and then further categorizes them by their primary propulsion method and, where applicable, engine size or gross vehicle weight.

Starting March 4, the U.S. imposed a 25% tariff on Canadian goods and 10% on energy and potash. Another 25% tax was imposed on steel and aluminium March 12, and automobiles on April 3, impacting 500,000 Canadian jobs, with auto parts tariffs planned for May 3. Notably, some exclusions based on U.S. content were offered under CUSMA.

Canada swiftly retaliated, imposing 25% tariffs on $30 billion of U.S. goods, effective March 4. It applied 25% reciprocal tariffs on $29.8 billion of steel, aluminium, and other U.S. imports from March 13. On April 9, Canada levied 25% tariffs on non-CUSMA compliant U.S. vehicles and non-North American content of compliant vehicles, targeting $35.6 billion in 2024 imports.