1 week Ago By Matthew Guy
Article content Buying a new vehicle in Canada just got a lot murkier. In response to Donald Trump’s decision to levy tariffs on vehicles entering America, the Great White North is applying its own tariffs of up to 25%, taking aim at fully assembled vehicles entering Canada from south of the 49th parallel. That’s the maximum rate, however, and likely won’t apply to most vehicles imported into this country.
Any machine complying with the CUSMA free-trade agreement will be tariffed only on the non-Canadian and non-Mexican content in their assembly. Trouble is—that’s still the bulk of what’s contained in most cars. In fact, those pulling the levers are estimating each imported vehicle from the States has only 15% Canadian and Mexican content, meaning tariffs will apply to 85% of the value of many new cars being brought here from America.
How will that look in terms of dollars and cents? Get ready for some frightening math. After discounting for Canadian and Mexican parts content, the default tariff rate for compliant vehicles imported from the United States is 21.25%; for the average new car sold in Canada, estimated to cost $67,259, that’s a surtax of $14,292.
That’s approximately an extra couple of hundred dollars on the typical car loan, a sum likely to torpedo the budgets of many shoppers. The retaliatory tariffs levied by the Canadian government went into effect just hours before President Trump said he’d be enacting a 90-day pause on tariffs for most countries while negotiations continue; it’s still unclear how that impacts the Canadian auto industry, as the U.S.
administration seems to be effecting variances to the pause on a sector-by-sector business. Meanwhile, monies collected from Ottawa’s tariffs on imported-from-the-U.S.
vehicles will be applied to programs designed to support autoworkers and companies affected by America’s trade actions. Finance Minister François-Philippe Champagne said Canada will continue to push back on the United States’ tariffs, stating “the government is firmly committed to getting these U.S.
tariffs removed as soon as possible, and will protect Canada’s workers, businesses, economy, and industry.” Actions may be put in place for vehicles produced by companies with a manufacturing footprint in Canada, and the government is talking about a so-called “remission framework” which is apparently designed to incentivize production and investment in our county. There was a time when the world worried itself with nuclear-based mutually assured destruction.
Now it seems the destruction will be economical. Sign up for our newsletter Blind-Spot Monitor and follow our social channels on X , Tiktok and LinkedIn to stay up to date on the latest automotive news, reviews, car culture, and vehicle shopping advice..
