Dream car plus 25% tariff? Ontario retiree's classic Mustang caught in trade war

The bright orange 1969 Ford Shelby Mustang is Cameron Gillespie's dream car and something he plans to keep for the rest of his life, making the $105,000 Cdn price tag worth it. 

But when the 65-year-old retired financial analyst began the process to import it from an Iowa car dealership to his Brantford, Ont., home in May, he learned he'd have to pay significantly more than expected due to the trade war between Canada and the U.S. 

Classic cars are among the U.S. goods Canada has imposed a 25 per cent tariff on, so including sales tax, Gillespie estimates he will be paying $30,000 in extra duties to the Canadian government. 

"This tariff is not impacting the Americans. It's impacting us individual Canadians," he said.  "I'm caught in the politics of two countries fighting with each other and it's the Canadian government who has implemented this tariff, not Donald Trump." 

In response to the U.S. president imposing a 25 per cent tariff on vehicles in April, Ottawa launched reciprocal tariffs, which it said would be in place until the Americans lift their levies. 

Meanwhile, Gillespie said, his Mustang remains parked at the Iowa dealership as he pushes for a tariff exemption — similar to what auto producers in Canada have. 

Exemption for auto producers

In May, the federal government announced these large companies would be provided with "relief from Canada's counter-tariffs" as long as they maintain domestic production. That means they are able to import "a certain quantity" of new vehicles from the U.S. without paying the extra 25 per cent. 

"It is intended to support continued automotive production and investment in Canada," said Department of Finance spokesperson Benoit Sabourin. 

No such relief was afforded to individual Canadians wishing to import classic or used cars from the U.S., the Department of Finance confirmed. The 25 per cent tariffs apply even to vehicles (like Gillespie's Mustang) that were previously duty free through the Canada-U.S.-Mexico Agreement on trade.

"These measures were not imposed lightly — they were necessary to respond to unjustified U.S. actions and to protect Canada's economic interests," said Sabourin. 

"The government continues to monitor the trade situation closely and will not hesitate to adjust its response, as required, to meet its policy objectives."

Gillespie said he contacted the Department of Finance, and his local Conservative member of Parliament has written a letter on his behalf, but he's heard nothing back. 

"I'm disappointed in our government, doing this to individuals," Gillespie said. "I don't want to lose [the car] but I don't want to pay an extra [$30,000] for something that doesn't make sense and shouldn't apply to begin with." 

Gillespie's Shelby Mustang is a high-performance, two-door convertible. The iconic cars were originally built by Shelby-American, a company founded by famous racing car driver and automotive designer Carroll Shelby, and then by Ford.

Conflicting information

Before Gillespie bought the Mustang on May 30, he said, he called Canada Border Services Agency (CBSA) to check if it would be subject to a tariff.

"I didn't want any surprises," he said. "They informed me there are no tariffs on classic cars over 25 years old." 

He went ahead with the purchase, but when he called Toronto-based transportation company TFX International to bring it across the border, it informed him there would in fact be a tariff, plus tax, bringing the total from $118,650 to $148,300. 

The CBSA, which manages the flow of people and goods across Canada's borders, including land crossings from the U.S., did not provide a comment before publication. 

Adam Horodnyk, vice-president of TFX International, said the tariffs have greatly impacted the business, as few Canadians are able or willing to pay the extra expense for classic cars.

"The number of people calling me, asking about importing a classic car, the second I tell them about a tariff, they say, 'We're not buying the car,'" or they're keeping them in the U.S., he said. 

Right now, TFX is holding about 50 cars in a warehouse across the border for Canadians hoping the trade war will end soon, said Horodnyk. 

The company is down $50,000 to $100,000 in transportation sales a week and the federal government is missing out on collecting taxes, he said. 

The tariff impacts are also being felt "massively" across Canadian sectors, from the truck drivers who import vehicles to the mechanics who tune them up, to the classic car shows raising money for charities, said Horodnyk. 

"It makes no impact on the trade dispute. There's no way you could possibly convince me this [tariff on classic cars] is in some way going to change what the president of the United States does when it comes to Canada." 

He said the Canadian government's tariff exemption for auto producers importing new cars is "unfair" as individual Canadians wanting to import a 50-year-old vehicle aren't provided with the same relief.

And slowing down individual sales of vintage Cadillacs or Lincolns won't hurt business for General Motors or Ford, Horodnyk argues. 

"I would like to believe this [policy] is an oversight and can be corrected," he said. "All it's doing is hurting Canadians."