Yesterday afternoon, President Donald J. Trump announced new tariffs on their global trading partners. The executive order outlines a 20 per cent tariff on goods from the European Union, 34 per cent on Chinese exports and a minimum of 10 per cent on exports from most other countries.
While Canada is exempt from these new measures, existing tariffs remain, including a 25 per cent tariff on steel and aluminum, and a new 25 per cent tariff on foreign-made vehicles taking effect today.
USMCA-compliant Canadian cars and parts have temporary exemptions from some of these tariffs, but not all. The United States of America is developing a system to assess American-made content in foreign cars, potentially exempting that portion by May 3. However, the policy remains unclear and could destabilize the auto industry in both countries. We encourage you to consult with your customs broker or trade counsel for further guidance and to ensure compliance.
Canada’s response
Prime Minister Carney announced that the government is responding to the United States of America-tariffs with 25 per cent tariffs on all vehicles imported from the United States of America that are not compliant with Canada-United States-Mexico Agreement (CUSMA), and on non-Canadian content of CUSMA-compliant vehicles from the United States of America. He added that the tariffs will not affect auto parts, referencing how integrated our production system is.
He added that the previously announced retaliatory tariffs will remain in effect.
Canada will be creating a framework for auto producers in Canada to get relief from the counter tariffs as long as they maintain production and investment in Canada. Carney stated that every dollar raised (expected to be around $8B) from the counter tariffs will go directly to the auto workers and companies affected by the tariffs.
Industry impact
- Stellantis is pausing production in Windsor and Mexico and laying off 900 workers at six United States of America plants.
- The Windsor plant will shut down for two weeks starting April 7, affecting 3,200 employees.
- Prime Minister Carney warned that United States of America tariffs could expand to Canadian lumber, pharmaceuticals, and semiconductors.
A first ministers’ meeting is scheduled for today to discuss Canada’s response.
Remission process for Canadian businesses
The government is reviewing tariff remission requests for United States of America goods where domestic alternatives are unavailable or economic harm is severe. Only Canadian-registered companies can apply, and all requests must meet strict criteria.
- Submit applications to: remissions-remises@fin.gc.ca
- Subject line: “U.S. Remission”
- Deadline: ASAP
Since this process is for businesses—not industry associations or unions—AIA Canada cannot apply directly. However, we are actively monitoring developments and will provide updates as they become available.
For questions or to provide feedback, please contact:
Emily Holtby
Vice President of Government Relations, AIA Canada