By Steven Symes 
Canada, our northern neighbor once perceived as too nice but also having a penchant for poutine, has decided to levy a 25 percent tariff on all cars made in the United States. This comes after the Trump administration announced a 25 percent tariff on goods imported from Maple Syrup Land, although a timeline of when that would happen wasn’t released.
Car shoppers are discovering a loophole in the auto tariffs.
However, Canada imposed its tariffs on American cars starting at 12:01 am ET on April 9, showing it’s serious about sticking it to the US of A. However, there’s a catch: any vehicles that comply with the United States Mexico Canada Agreement will only incur the 25 percent tariff for components used that weren’t made in Mexico or Canada, reports Car and Driver.
Canadian Finance Minister Francoise-Philippe Champagne justified this escalation by explaining its response to “unwarranted and unreasonable tariffs imposed by the US on Canadian products.” He went on to explain the true intention was to get the United States to drop its tariffs, not to stop Canadians from driving American cars.
While some vehicles are assembled in Canada, citizens of that country drive quite a few assembled here in the US, and not just from the Big Three. The big question nobody seems to be asking is how much will this move hurt the US economy versus Canada’s?
Plenty of accusations are being thrown around by the two countries, and there are no shortage of media fact checks about claims made by both. Either way, if the tariffs do extend out for a long period of time, it could result in a shift for automotive manufacturing.
After all, the US has almost nine times the population of Canada, so we hold considerably more clout in the automotive sector. But the US has historically sourced raw materials like steel and aluminum from up north that are vital for producing vehicles here.
We’ll keep following the tariff developments for the auto industry as things continue to unfold.
Image via Stellantis