On April 3, 2025, Canadian Prime Minister Mark Carney announced that Canada would impose a 25% tariff on all vehicles imported from the United States that do not comply with the USMCA (United States-Mexico-Canada Agreement) trade agreement. This move comes in response to the recent 25% tariffs imposed by the U.S. on Canada and Mexico, which took effect on April 2, 2025.

The reason for this is the Trump administration's policy, which includes promoting U.S. manufacturing and reducing the trade deficit by imposing tariffs on non-USMCA compliant vehicles. Canada's retaliatory measure could further escalate trade tensions between the two countries. Experts say this will impact the North American automotive supply chain, as the trade in vehicles and parts between Canada and the U.S. is highly integrated.