Hold onto your wallets, car buyers! A trade war is brewing, and it’s about to hit the electric vehicle market hard. Canada has announced a 25% tariff on US-made EVs as retaliation for US tariffs on Canadian goods. This could mean a significant price hike for anyone looking to buy a US-built EV in Canada.

Tit-for-Tat: Tariffs Across the Border

This all started when the US imposed tariffs on Canadian and Mexican imports. Canada’s response is a hefty $155 billion tariff package targeting a range of US goods, including—crucially—electric vehicles. The goal, according to Canadian officials, is to protect Canada’s interests, consumers, workers, and businesses.

Which EVs Are Affected?

The list of US-made EVs facing this 25% import duty is surprisingly long, even though only a small fraction qualify for the US federal EV tax credit. We’re talking about models like the Acura ZDX, Cadillac Lyriq, Chevy Silverado EV, Ford F-150 Lightning, Hyundai Ioniq 5, Kia EV6 and EV9, Lucid Air and Gravity, Mercedes-Benz EQS, Rivian EVs, VW ID.4, and any Tesla models not made in China.

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The Auto Industry in the Crossfire

The auto industry is particularly vulnerable in this trade war. Cars and parts regularly cross the US-Canadian border, and these new tariffs could disrupt supply chains and drive up costs for manufacturers. GM, in particular, could be hit hard, as many of its truck parts and assembly occur on both sides of the border.

Who Pays the Price?

Experts warn that automakers can only absorb so much of these added costs. Eventually, these tariffs will likely be passed on to consumers, meaning higher prices at the dealership. Even if the tariffs are eventually rescinded, this trade spat is likely to reshape how automakers think about the North American market.

What Does This Mean for You?

If you’re in the market for a US-made EV in Canada, prepare for sticker shock. These tariffs could add thousands to the price tag. It’s a tough situation for consumers, and it highlights the complex economic consequences of trade disputes.

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