U.S. President Donald Trump on Wednesday signed an executive order to impose 25% tariffs on all automobile imports to the United States next week but the deep integration of the North American industry means vehicles coming from Canada could face a lower rate.
The executive order, released publicly Wednesday evening, said duties on automobile imports will take effect on April 3. A fact sheet provided Wednesday by the White House said automobiles imported under the Canada-U.S.-Mexico Agreement, also called CUSMA, will only be tariffed on the value of content not made in the United States.
The executive order also includes tariffs on certain auto parts like engines, transmissions and electrical components. Automobile parts under CUSMA will not face Trump’s latest duties until Commerce Secretary Howard Lutnick, in consultation with U.S. Customs and Border Protection, “establishes a process to apply tariffs to their non-U.S. content,” the White House said.
Prime Minister Mark Carney called the move a “direct attack” on Canadian autoworkers, and promised swift action and support.
“We will defend our workers. We will defend our companies. We will defend our country. And we will defend it together,” he said in Kitchener, Ont.
Carney called the duties “entirely inconsistent” with CUSMA and “the long history of relations in the auto sector right back through the Auto Pact,” an automobile trade agreement signed between Canada and the U.S. in 1965.
The continental trade pact, also called CUSMA, was negotiated during the first Trump administration and boosted rules requiring a majority of automobile parts to be North American for the vehicle to be tariff-free. The new duties are likely to sew confusion among the automobile industry.
Trump said the automobile tariffs were permanent and automakers would “have to move their parts divisions back to the United States.”
The president’s on-again, off-again trade war has caused uncertainty in markets and the automobile sector. Shares of the Big Three automakers — Stellantis, Ford and General Motors — all slid in after-hours trading Wednesday. Tesla’s stock was also down.
Trump’s automobile levy is the first to hit since Canada’s federal election began four days ago, but the president’s tariffs and ongoing threat to annex Canada have become the top issue for a large number of Canadians ahead of the April 28 vote.
Conservative Leader Pierre Poilievre said his message to Trump after the latest tariff announcement was to “knock it off.”
“These tariffs are simply causing chaos in markets. They are dislocating workers on both sides of the border.”
Poilievre said at a campaign stop in Montmagny, Que., before Trump confirmed the tariffs. “Stop threatening Canada with tariffs. Stop talking about our sovereignty.”
NDP Leader Jagmeet Singh said Wednesday evening that the tariffs are why Carney should have recalled Parliament ahead of the campaign to legislate emergency relief for potentially laid-off workers. Last Friday, Carney temporarily waived the one-week waiting period for workers to be able to claim employment insurance.
Dave McDowell, an autoworker at the St. Catharines, Ont.-based THK Rhythm Automotive, said the latest tariffs create more uncertainty for the sector.
McDowell, who is also president of Unifor Local 1859, said operations have slowed down “a little bit,” but he expects the plant is waiting to see what happens on April 2 when Trump is set to implement what he calls “reciprocal” tariffs by raising U.S. duties to match the tax rates that other countries charge on imports.
“There’s just a lot of people worried, they have to put up with this for the next four years and there’s no way of knowing what he’s going to do,” McDowell said at a NDP campaign office in London, Ont.
Lana Payne, national president of Unifor, said Canadian autoworkers have been an important part of the economy for more than 100 years and the union will do everything possible to ensure jobs stay in Canada.
“These are not Donald Trump’s jobs to steal. They are not Donald Trump’s jobs to take. They are Canadian jobs,” she said.
Earlier this month, Trump hit Canada with economy-wide tariffs, only to partially pause the duties a few days later. It’s not clear whether those sweeping tariffs, which Trump has linked to the flow of fentanyl, are set to return next week. The White House has not responded to a request for a timeline.
Trump did move forward earlier this month with 25% tariffs on all steel and aluminum imports to the U.S., including Canadian products.
Ontario suspended its electricity surcharge to three U.S. states earlier this month after Premier Doug Ford had a meeting with Lutnick in Washington where he was assured there would be no more surprises.
“Well, here’s the surprise,” Ford said Wednesday. “I honestly believe the American administration some days can’t predict what President Trump’s going to say.”
Ford said he was waiting to see what would happen with the reciprocal tariffs, adding he’s asked Carney to hold a meeting with all premiers about further retaliatory action to the mounting duties.
“We have two options here: 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.”
This report by The Canadian Press was first published March 26, 2025.
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