In a decision likely to impact Canada’s manufacturing sector, U.S. President Donald Trump has announced 25% tariffs on “all cars that are not made in the United States.”
Trump said there is “absolutely no tariff” for cars that are built in the U.S.
The new tariffs were codified in what Trump called a “presidential proclamation” that he signed in the White House. The new tariffs go into effect on April 2.
The Trump administration added that the new tariffs are in addition to duties that are already in place for foreign vehicle imports into America and will provide the U.S. with over $100 billion of new annual revenue.
The new tariffs drew immediate condemnation from around the world, including among U.S. automakers who source many of their vehicles and parts from outside America.
European Commission President Ursula von der Leyen said in a statement that “tariffs are taxes — bad for businesses, worse for consumers.”
Auto stocks fell in after-hours trading following Trump’s announcement. Shares of General Motors (GM), Stellantis (STLA) and Ford (F) each declined 5% on the tariff news.
Senior executives at the ‘Big Three’ U.S. automakers have warned that Trump’s tariffs will devastate the U.S. auto sector and lead to higher vehicle prices for American consumers.
Trump’s unpredictable and frequently shifting policies on tariffs and trade in general have caused turmoil in the stock market and left business leaders uncertain about how to plan for the future.
Trump plans to announce more tariffs on a wide range of foreign imports on April 2, an event he is calling “liberation day” for the U.S. economy.
For Canada’s automotive sector that is concentrated in southern Ontario near the border to Detroit, Michigan, the new tariffs could be potentially devastating.
All three of the major U.S. automakers have some manufacturing located in Canada.
