Donald Trump announced on March 26 that his administration would impose a 25 percent tariff on auto imports from Canada, the European Union, Japan, and South Korea. He also threatened to introduce additional tariffs targeting major US trading partners.
Canada: In a dramatic shift in Canada’s foreign policy, Prime Minister Mark Carney on Thursday (March 27) declared that the long-standing economic and security relationship between Canada and the United States has ended, responding to US President Donald Trump’s announcement of new auto tariffs that could severely impact Canada’s economy. Canada must fundamentally reimagine our economy in the face of escalating tariffs imposed by United States President Donald Trump, Prime Minister Mark Carney said on Thursday, declaring the old relationship between Canada and the US is now over. Carney promised to bring retaliatory measures, reduce internal trade barriers and pivot Canada’s economy away from reliance on the US after Trump announced new auto tariffs that will begin next week.
“Over the coming weeks, months and years, we must fundamentally reimagine our economy,” Carney told media in Ottawa after meeting with the cabinet committee on Canada-US relations. “The old relationship we had with the United States, based on deepening integration of our economies and tight security and military cooperation, is over.”
More to be announced on Apr 2: PM Carney
Carney wouldn’t say exactly what retaliatory measures the federal government will take in response to Trump’s latest round of tariffs. He said more will be announced on April 2, when the new auto tariffs and further reciprocal tariffs on all foreign trading partners are set to begin. Carney confirmed he has not yet spoken to Trump since becoming prime minister earlier this month, but plans to do so in “the next day or two” after he said Trump reached out Wednesday evening (March 26) to schedule a call.
“I appreciate the opportunity to discuss how we can protect our workers and build our economies,” Carney said. “I will make clear to the president that those interests are best served by cooperation and mutual respect, including of our sovereignty.”
Carney pressed pause on his federal election campaign as the Liberal Party leader on Thursday to chair the cabinet committee meeting weighing Canada’s response to the fresh round of tariffs coming from Trump administration. As per the caretaker convention, Carney can act in his prime ministerial capacity during an election campaign as long as his actions are routine, non-controversial, agreed to by opposition parties or “urgent and in the public interest.”
Carney reiterated his promise from last week after meeting with Canada’s premiers that a Liberal government, if re-elected, will ensure all federal limits on internal trade will be removed by July 1, and take steps to boost domestic investment.
“I reject any attempts to weaken Canada, to wear us down, to break us so that America can own us. That will never happen,” Carney said. “Our response to these latest tariffs is to fight, to protect, and to build.”
Donald Trump signs executive order for 25 pc tariffs on all foreign-made vehicles
Trump signed an executive order on Wednesday for 25 per cent tariffs on all foreign-made cars and light trucks, in addition to tariffs already in place on those goods. The auto tariffs that are set to go into effect April 2 will not apply on U.S.-made parts in foreign-made vehicles, according to the order. The new auto tariffs are in addition to 25 per cent tariffs on all Canadian goods, as well as an additional 25 per cent on steel and aluminum imports and a 10 per cent levy on Canadian energy.
Global reciprocal tariffs on all foreign imports, including from Canada, are also planned for April 2, which is when the auto tariffs are expected to come into force. Industry groups said Thursday the new tariffs will bring immediate consequences to Canada’s auto sector, warning of “chaos and damage” to the highly integrated North American supply chain where vehicles and components cross borders multiple times during production.
Carney referenced plans he had announced while campaigning as Liberal leader on Wednesday such as an all in Canada auto manufacturing network and a $2-billion strategic response fund to protect Canadian workers and shift reliance away from US supply chains. “We have a very clear strategy,” he said Thursday of “backwards integrating” the auto supply chain into steel and aluminum and critical minerals sectors to feed into each other domestically.
Carney has vowed, both prior to the election campaign as prime minister and while on the campaign trail as Liberal leader, to support workers and diversify the domestic economy. Canada has already responded to Trump’s trade actions with counter-tariffs on almost $60 billion worth of American goods, which were announced in retaliation for the 25 per cent tariffs on all Canadian goods and a subsequent round that was retaliation for the steel and aluminum tariffs.
Another round targeting $125 billion worth of US goods is set to begin on April 2, and the government has not indicated those are off the table since Carney took over as prime minister. Carney on Thursday rejected Trump’s threat from earlier in the day of “large scale” tariffs on Canada if it takes retaliatory actions that “do economic harm to the USA.”
“I take note of the president’s comment. I don’t take direction from him,” he said. Trump’s tariffs and repeated threats to Canada’s sovereignty are emerging as a key campaign focus for the main federal parties in the 2025 election campaign.
Conservative Leader Pierre Poilievre urged Trump to “knock it off” and “stop attacking America’s friends.” “Here he goes again: attacking his closest neighbor and America’s best friend with new tariffs that will drive up the cost of living for American consumers and drive down American wages, while damaging a historic friendship,” he said at a campaign event in Coquitlam, BC.
He said a Conservative government led by him would get the Canadian economy out from “under the American thumb” by reducing internal trade barriers, boosting resource projects and selling those resources to partners other than the US.
“If you, Mr. Trump, don’t want them, the rest of the world does,” he said.