Canada Imposes Counter Tariffs on Non-CUSMA Auto Imports from the United States

Jakarta, Pintu News – Trade tensions between the United States, Canada and Mexico have risen again after new tariffs were imposed by the United States. Canada officially announced a retaliatory measure in the form of a 25% tariff on imported vehicles from the United States that do not meet the provisions of the Canada-United States-Mexico Agreement (CUSMA). This policy came into effect on April 9, 2025 and is part of the latest escalation of the trade war between North American countries.

Canada-US Trade War Background

On March 4, 2025, the United States government imposed a number of new tariffs on Canadian products, including a 25% tariff on general merchandise and 10% on energy and potash exports. A few days later, on March 12, 2025, an additional 25% tariff was imposed on Canadian steel and aluminum products.

It culminated on April 3, 2025, when the US imposed a 25% tariff on car imports from Canada. This policy immediately had a major impact on the Canadian auto industry, which employs more than 500,000 people across the country. The American move was heavily criticized by the Canadian government as unfair and detrimental to the national economy.

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Canadian Government Countermeasures

In response to the US policy, the Canadian government through the Department of Finance announced the implementation of a 25% countervailing tariff on imported vehicles from the United States that do not meet CUSMA standards. This tariff applies to fully assembled vehicles as well as non-Canadian and non-Mexican vehicle components on CUSMA vehicles imported from the US.

Canada’s Finance Minister, François-Philippe Champagne, stated that this step was taken to protect Canada’s national interests, labor, and businesses. He also emphasized that this policy will remain in place until the United States lifts its tariffs on the Canadian automotive sector.

Meanwhile, Canada’s Minister of International Trade, Dominic LeBlanc, said that Canada does not want a tariff conflict. However, the American decision is considered to force Canada to take action to maintain economic stability and protect domestic industries.

Potential Escalation of Canada-US Trade War

Currently, Canada’s tariff policy covers imported products from the United States worth more than $30 billion or around Rp509.8 trillion (1 USD = Rp16,995). However, the Canadian government stated that it is ready to expand its tariff coverage to $155 billion or around Rp2,634 trillion if the United States does not revoke its tariff policy.

Canada affirms its commitment to confronting all unreasonable and harmful US tariffs. The Canadian government also continues to push for negotiations to eliminate these tariffs, while protecting domestic workers and industries from the negative impacts of these international trade policies.

International Response to US Tariff Policy

In addition to Canada, other countries such as China and the European Union (EU) have also shown strong reactions to the United States’ tariff policy. On April 4, 2025, China announced that it would impose a 34% tariff on all imported products from the US starting April 10, 2025. President Donald Trump then threatened to increase tariffs to 50% if China did not reverse the policy.

The Chinese government through its embassy in the US stated that they will not back down in the face of tariff threats from the US. In fact, China calls US actions an unacceptable form of blackmail and is ready to fight to the end if the US continues the policy.

Meanwhile, the European Union on March 12, 2025 also took a similar step by re-imposing tariffs on US products such as bourbon and motorcycles starting April 1, 2025. In addition, the EU also plans to impose additional tariffs on €18 billion worth of US goods in mid-April 2025.

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Global trade tensions triggered by the United States’ tariff policy have created a wave of strong responses from various countries, including Canada, China, and the European Union. In the context of North America, the trade war between Canada and the United States is predicted to continue if there is no agreement or revocation of tariff policies.

Canada’s retaliatory move through the imposition of tariffs on non-CUSMA automobile imports from the US is part of its efforts to protect the national economy amid increasingly complex global political and economic dynamics.

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Reference:

• Cryptopolitan. Canada to impose 25% tariffs on non-CUSMA auto imports from the U.S.. Accessed April 10, 2025.
• Featured Image: Fintech