The Great Canadian Counterstrike: Retaliation on US Auto Imports

According to Carscoops, trade tensions among North American countries escalated once again as Canada started imposing a 25% tariff on cars manufactured in the US as of recently.

Canada’s approach is considered more selective and strategic, aiming to send a message without damaging the entire automotive industry.

“Canada continues to strongly respond to all unjust and unwarranted tariffs that the US imposes on Canadian products,” asserted Canada’s Minister of Finance, François-Philippe Champagne, in a statement.

He also pledged to promptly eliminate the taxes currently imposed by the US to protect Canadian workers, businesses, economy, and industry.

As per Carscoops, Canada’s mentioned plan involves implementing its own tariff, with a 25% duty on cars imported from the US starting on April 9.

Per Carscoops, Canada’s 25% import tax solely targets vehicles that do not comply with the US-Mexico-Canada Agreement (USMCA). Cars adhering to the USMCA will still be taxed if they use parts not originating from Mexico or Canada.

“We have advised the Canadian Prime Minister to ‘stay away from US parts right now.’ We also emphasized that if the Prime Minister wants to impose reciprocal tariffs, make sure to target Americans. Don’t inadvertently harm Mexican suppliers and partners. We don’t want to do this, but Canada has to respond,” shared Flavio Volpe, the head of the Automotive Parts Manufacturers’ Association in Canada, with CNBC.

Carscoops noted that it was President Trump who negotiated the USMCA with the involved countries, but he is now opposing them.

Meanwhile, Canada seems prepared to outline a “lifeline” for car manufacturers by establishing an exemption framework. This could incentivize production in Canada by subsidizing a portion of the tariff costs.

According to Carscoops, the Unifor National, Canada’s national labor union, also sent strong messages to the UAW, the United Auto Workers union in the US.

“There is absolutely no justification for the US to tax Canadian cars. Canada did not initiate this trade war, but we have no choice but to fight it. We refuse to compromise and sacrifice Canadian auto jobs and our industry to appease Donald Trump,” emphasized Unifor National President Lana Payne.

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