In response to the Trump administration’s latest tariff announcement, both China and Canada have rolled out retaliatory tariffs aimed at the US. As these retaliatory actions unfold, businesses in both China, Canada, and the US will be forced to navigate a more complex and unpredictable global marketplace.
China’s Response to “Liberation Day”
Beginning April 10, China will impose a universal 34 percent tariff on imports from the US. In addition to the tariffs, the Chinese government has limited the export of rare earth elements—materials essential for manufacturing electric vehicles, wind turbines, and various high-tech devices.
China’s customs administration has ordered a halt to chicken imports from the US. This is part of further trade sanctions aimed at US industries, with 27 additional companies added to China’s list of entities subject to export controls and other restrictive measures.
Canada’s Response to US Auto Tariffs
In a direct response to the US imposing a 25 percent tariff on Canadian-made cars, Canada has announced it will introduce an identical tariff on vehicles imported from the United States. Unlike the US tariffs, which have extended to auto parts, Canada has opted not to impose tariffs on automotive components. This decision reflects Canada’s unique position in the North American automotive supply chain, where auto parts often cross the Canada-US border multiple times before being fully assembled.
Furthermore, Canada has also assured that vehicles manufactured by companies operating within the country—including major players like Stellantis, Ford, General Motors, Honda, and Toyota—will not face tariffs when importing vehicles made in the US into Canada. This measure is intended to protect Canadian car manufacturers from the full brunt of the tariff war.
With China’s new tariff taking effect on April 10 and Canada’s automotive tariffs already set in motion, the coming months will be crucial in determining how these trade wars evolve. We will continue to monitor developments related to these tariffs and provide more information as it becomes available. If you have additional questions about how this may impact your business, reach out to your Mohawk Global Representative.