“That’s finished with these tariffs,” Canadian Prime Minister Mark Carney said in French, speaking of the 1965 Canada-US Automotive Products Agreement. He called it the most important deal in his lifetime.
The remark came on a Thursday in Ottawa, a day after US President Donald Trump announced a 25% tax on imported vehicles and vehicle parts. “This is permanent,” Trump said, according to the BBC. The White House said the car tariffs would start on 2 April, with charges on businesses importing vehicles beginning the next day. Taxes on parts were set to follow in May or later.
Carney’s response
Carney told reporters after a cabinet meeting that Canada’s old relationship with the United States, “based on deepening integration of our economies and tight security and military cooperation, is over”. Canadians, he said, must “fundamentally reimagine our economy.”
He promised retaliatory tariffs with “maximum impact” on the US. Canada could keep an auto industry alive under the American tariffs, he said, if government and business “reimagine” and “retool” it. He also said Canada needed an economy Canadians can control, which would include rethinking trade with other partners. Whether the country can keep a strong trading relationship with the United States, he added, remains to be seen.
Carney scrapped his campaign plans for Quebec ahead of the general election the following month and met ministers to discuss trade options. He said Trump had asked the night before to schedule a call within a day or two. It would be their first.
Tariffs already in place
The US had already partly imposed a blanket 25% tariff on Canadian goods, plus a 25% duty on all aluminium and steel imports. Canada had so far answered with about C$60bn ($42bn) of tariffs on US goods. The US imported about eight million cars the previous year, roughly $240bn in trade and about half of overall sales. Mexico is the top supplier, followed by South Korea, Japan, Canada and Germany.
Early Thursday, Trump warned Canada and the EU against joining forces. “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both,” he posted on Truth Social.
Opposition and Mexico
Conservative leader Pierre Poilievre called the tariffs “unjustified and unprovoked”. NDP leader Jagmeet Singh met union leaders and car workers in Windsor, Ontario, and called the tariffs a “betrayal” of a close ally. He said any auto company that moves operations out of Canada because of them should be blocked from selling cars in the country.
Mexican President Claudia Sheinbaum declined to comment directly on the car tariffs but said her government would “always defend Mexico”. She promised an “integral response” on 3 April and pointed out that many US car companies operate in both Mexico and Canada under a North American free trade agreement Trump negotiated in his first term. “Of course, there shouldn’t be tariffs,” she said.
