Canada's counter-tariffs on U.S. goods took effect at 12:01 a.m. on Sept. 8, doubling the surtax on U.S.-origin steel and aluminum from 25% to 50%, aligning with the U.S. Section 232 rate, according to Norton Rose Fulbright and Buckland Customs.
The increase adds to a run of collision parts tariffs weighing on a supply chain that collision repair shops rely on for steel and aluminum body panels, arriving roughly two weeks after President Donald Trump said a separate set of U.S. tariffs on Canadian autos, auto parts, and steel would rise to the same 50% rate starting Jan. 1, 2027, according to CBS News.
The Canadian measures cover $27.6 billion in U.S. imports at three rates, 15%, 25%, and 50%, with steel and aluminum among the products moved to the top rate, according to Buckland Customs. Beyond steel and aluminum, the countermeasures also target appliances, dairy products, agricultural equipment, pulp and paper products, and electronics, according to Canada's Department of Finance.
Canada's existing 25% counter-tariff on U.S. automobiles remains separately in place, according to Norton Rose Fulbright, and goods already in transit to Canada as of Sept. 8 are not subject to the new rates, Buckland Customs reported.
Canada's response followed the breakdown of trade talks between the two countries in late August, when negotiators failed to reach a deal and the U.S. imposed a 50% duty on about $20 billion of Canadian goods.January threat targets auto parts for the first time
Trump escalated further on Aug. 24, posting on Truth Social that tariffs on Canadian cars, trucks, automotive parts, and steel would rise to 50% on Jan. 1, 2027, while vehicles built in the United States would remain exempt, according to CBS News and Fox Business. Non-U.S. automobiles and parts currently face a 25% tariff, and Canadian steel imports to the U.S. already carry a 50% duty, CBS News reported. The January increase would mark the first time a tariff has applied specifically to automotive parts under this round of trade actions, according to Al Jazeera.
Industry reaction
Trade attorney Barry Appleton, co-director and distinguished senior fellow of the Center for International Law at New York Law School, told CBS News that the added cost of the auto tariff is collected from U.S. buyers rather than the Canadian government, saying "the first invoice usually lands in a Michigan showroom, not in Ottawa."
Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, pointed to how deeply the parts supply chain runs in both directions, telling Al Jazeera, "Without those specific parts, auto assembly throughout the US would halt."
Adds to a year of tariff pressure on collision parts pricing
The latest escalation follows a series of 2026 tariff actions that have already pushed up collision parts costs: about 44% of OEM collision parts sold in the U.S. are manufactured overseas, and existing tariffs already add roughly $100 to the parts line of an average repair order, according to PartsTrader data cited in Autobody News' coverage of semiconductor and European tariff actions.
Shops sourcing OEM and certified aftermarket parts from Canada and Mexico were already facing continued uncertainty after the U.S. chose not to extend USMCA under its existing terms at the agreement's first mandatory six-year review on July 1. A separate import surcharge expired July 24, adding a second trade deadline that shaped parts pricing in the months before this latest escalation.
Shop-level data captured some of that pressure earlier in 2025. An IMR survey conducted that April found 38.6% of shops already reporting a direct hit from tariffs, a share that climbed to about 70% at larger operations running eight-plus bays.
Detroit's three largest automakers took on billions of dollars in added tariff costs that year, with General Motors alone reporting a $1.1 billion charge in the second quarter, the same review noted. A CIECA webinar that same year projected that acquisition-cost tariffs could push estimate totals for OE parts sourced from Canada and Mexico higher by $100 to $150, according to earlier Autobody News coverage of the discussion.
Mitchell International's Q2 2026 Plugged-In report separately warned that continuing trade tensions and the unresolved USMCA review could drive replacement part costs higher again.
