Trump Imposes 25% Auto Tariffs on Foreign-Made Cars

In a move that could significantly disrupt North America’s auto industry, U.S. President Donald Trump has announced a sweeping 25% tariff on all foreign-made automobiles, including those manufactured in Canada. The tariffs, set to take effect on April 2, are part of Trump’s broader strategy to bolster American manufacturing and reduce reliance on imported goods.

“This is the beginning of Liberation Day in America,” Trump said. “Before I was elected, we were losing all of our plants that were being built in Mexico and Canada and other places. Now, those plants largely have stopped and they’re moving them to our country.

“We’ll effectively be charging a 25 per cent tariff. But if you build your car in the United States, there’s no tariff.”

The executive order signed applies to foreign-made cars and light trucks, in addition to tariffs already in place on those goods.

“We’re signing today, it goes into effect April 2, we start collecting on April 3,” Trump said.

For Canada, where the auto sector is a cornerstone of the economy, the new tariffs are cause for concern. Canadian factories produce millions of vehicles annually, with a large percentage destined for the U.S. market. The imposition of a 25% tariff could make Canadian-made cars significantly more expensive for American consumers, potentially slashing demand and putting thousands of jobs at risk.

Experts predict that without exemptions for Canada and Mexico, vehicle prices will soar. According to estimates from Cox Automotive, American consumers could see price increases of up to $3,000 for U.S.-made cars and as much as $6,000 for vehicles manufactured in Canada or Mexico. Such hikes could make Canadian exports uncompetitive, dealing a serious blow to automakers like General Motors, Ford, and Stellantis, which have significant production facilities in Ontario.

The tariffs also raise questions about the future of the Canada-United States-Mexico Agreement (CUSMA), which was meant to ensure stable trade relations between the three countries. Canadian officials had hoped the deal would shield the country from further protectionist measures by the U.S., but Trump’s latest announcement suggests that trade tensions are far from over.