Trump orders 25% auto import tariff, sparking political backlash and uncertainty for Canadian jobs
US President Donald Trump has signed an executive order to impose a 25 percent tariff on all automobile imports to the United States, a move that has triggered political condemnation and market uncertainty across North America.
According to The Canadian Press, Prime Minister Mark Carney called the measure a “direct attack” on Canadian autoworkers and said it was “entirely inconsistent” with the Canada-US-Mexico Agreement (CUSMA) and decades of auto trade cooperation.
Speaking in Kitchener, Ontario, Carney pledged, “We will defend our workers. We will defend our companies. We will defend our country. And we will defend it together.”
As per a White House fact sheet cited by The Canadian Press, vehicles imported under CUSMA will only be tariffed on the value of content not made in the United States.
However, duties will not apply until Commerce Secretary Howard Lutnick, in consultation with US Customs and Border Protection, finalises a tariff application process for non-US content.
There will be no long-term carveouts, and Trump stated the tariffs were permanent.
The new tariffs, scheduled to take effect April 2, will also apply to certain auto parts including engines, transmissions, powertrain components, and electrical systems.
Trump confirmed tariff collection will begin the following day.
As reported by BNN Bloomberg, the announcement has already impacted markets. Shares of Ford, General Motors, Stellantis, and Tesla dropped in after-hours trading, with Stellantis falling 2.8 percent.
The administration expects the tariffs to generate US$100bn in annual revenue and will be in addition to existing duties.
Trump, speaking from the White House, described the policy as “very modest” and said it was necessary to stop countries from “taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years.”
He added, “What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States.”
As per BNN Bloomberg, the new tariffs are expected to target a broad range of US car and light truck imports, valued at more than $240bn last year.
Trump claimed the tariffs would force companies to relocate production to the US. “Now those plants largely have stopped and they’re moving them to our country,” he said.
Trump also reiterated his support for a tax deduction on car loans for US-made vehicles.
“If you borrow money to buy a car, you’re allowed to deduct interest payments for purposes of income tax, but only if the car is made in America,” he said, requesting Republican House Speaker Mike Johnson include it in an upcoming tax-cut bill.
A wider set of “reciprocal tariffs” is also expected to be announced April 2. These would apply country-by-country duties to counter barriers on US imports.
Trump hinted that certain trading partners may be eligible for exemptions or reduced rates, and said new sector-specific tariffs on lumber, semiconductors and pharmaceuticals are being considered.
“That’s the real Liberation Day of America, and that’s going to be in April 2, and I look forward to it,” Trump said.
The Canadian response has included calls for emergency action.
According to The Canadian Press, NDP Leader Jagmeet Singh said the tariffs are why Parliament should have been recalled to legislate emergency relief for affected workers.
Last week, Carney temporarily waived the one-week waiting period for employment insurance claims.
Uncertainty is growing in Canada’s auto sector.
Dave McDowell, president of Unifor Local 1859 and an autoworker in St. Catharines, Ontario, said at an NDP campaign stop that operations have already “slowed down a little bit” and added, “There’s just a lot of people worried, they have to put up with this for the next four years.”
Lana Payne, Unifor’s national president, said Canadian autoworkers have contributed to the economy for over 100 years. “These are not Donald Trump’s jobs to steal. They are not Donald Trump’s jobs to take. They are Canadian jobs,” she said.
Conservative Leader Pierre Poilievre also responded, telling The Canadian Press that his message to Trump is to “knock it off.”
Speaking in Montmagny, Quebec, Poilievre said the tariffs are “dislocating workers on both sides of the border” and “causing chaos in markets.”
Earlier this month Trump also imposed 25 percent tariffs on Canadian steel and aluminium, and briefly introduced economy-wide tariffs linked to fentanyl flow, only to partially pause them days later.
The White House has not confirmed whether those broader tariffs will return next week.
Ontario Premier Doug Ford, who previously met with Lutnick and was told there would be no further surprises, responded Wednesday saying, “Well, here’s the surprise.”
He added that he has asked Carney to hold a meeting with all premiers to discuss potential retaliatory actions.
“We either roll over as a country and he runs us over 15 times and gets what he wants, or we feel a little bit of pain and we fight like we’ve never fought before,” Ford said. “I prefer the latter.”
As reported by BNN Bloomberg, analysts estimate the new tariffs could raise prices of imported vehicles by thousands of dollars.
One recent study found that tariffs on Canada, Mexico and China would add about $4,000 to the cost of producing a crossover vehicle, while a US-made electric vehicle could see a price increase of about $12,000.
Auto executives have warned that shifting production may take years due to supply chain complexities and factory build timelines.
Trump, however, told BNN Bloomberg he believes companies are already adapting, noting that Hyundai executives visited the White House this week to discuss a US$21bn expansion plan.
Trump called it “a clear demonstration that tariffs very strongly work.”
Despite the claims, BNN Bloomberg noted that Trump's trade duties have been unpredictable, marked by delays and reversals, which have rattled markets and left companies uncertain about investment and hiring decisions.
