Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Motor Vehicles

Key Points

• The US will add a 50 percent tax on certain Canadian goods listed in Annex II, on top of existing tariffs, starting August 19, 2026, in response to Canada's tariffs on US-made vehicles.
• Since April 2025, Canada has charged a 25 percent tariff on US motor vehicles that don't qualify for duty-free treatment under the USMCA trade deal, and even applies a partial tariff to some vehicles that do qualify.
• US vehicle exports to Canada fell by about 22 percent, or roughly $5.6 billion, over the past year because of Canada's tariff scheme.
• While US vehicle sales to Canada dropped, sales from Mexico, Japan, Korea, and Germany to Canada grew, showing other countries gained the market share the US lost.
• The new duty does not apply to goods already covered by separate national security tariffs on steel, aluminum, and similar products, or to civil aircraft covered under a separate trade agreement.