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ARTICLE · 04 APRIL 2025

Trump Tariffs & Canadian Made Cars

Millar Kreklewetz
Explore more from Millar Kreklewetz

On Wednesday March 25th, the President signed a proclamation which invoked s. 232 of the Trade Expansion Act of 1962, s. 604 of the Trade Act of 1974 and Section 301 title 3 of the U.S. Code.

CanadaInternational Law
Robert Kreklewetz
Robert Kreklewetz

HARD TIMES REVING UP FOR CANADIAN AUTOMOTIVE SECTOR

On Wednesday March 25th, the President signed a proclamation which invoked s. 232 of the Trade Expansion Act of 1962, s. 604 of the Trade Act of 1974 and Section 301 title 3 of the U.S. Code. This new Executive Order has imposed a 25% tariff on imports of automobiles and certain automobile parts.

What is a tariff?

A tariff is a duty imposed on the import of goods into a country, usually at a stated percentage, with the importer charged the corresponding amount based on the "value for duty" of the good. A 25% tariff on a $50,000 car is $12,500. Tariffs, if paid by a wholesaler or retainer are usually passed on down the supply chain and borne by the final consumer. In that sense, a tariff functions like a tax; the government imposes a price on goods making those goods more expensive. The hope is that by increasing the price of foreign goods, citizens will purchase homegrown alternatives.

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