Mark Carney says Canada will impose a 25% tax on US vehicles in response to “unjustified, unwarranted” tariffs imposed by the United States.
On Wednesday, Donald Trump announced broad tariffs on dozens of countries, but did not impose new trade tariffs on Canada or Mexico. Despite the reprieve, the US has imposed 25% tariffs on Canadian steel, aluminum, and vehicles.
“The president’s actions will reverberate here in Canada and around the world,” the Canadian prime minister stated during a press conference. “They are all unjustified, unwarranted, and in our judgment misguided.”
In response to US trade policy, Carney stated that his government would impose taxes on vehicles that do not comply with the continental free trade agreement. The new tariffs would not apply to auto parts or vehicle content from trade partner Mexico.
Carney’s remarks come against the backdrop of a global economy in turmoil. Trillions of dollars have been wiped out of markets as multiple countries grapple with a new – and grim – trading relationship with the United States.
The newly installed prime minister cited recent conversations with Mexico’s president, Claudia Sheinbaum, as well as European leaders and trade officials, as part of a larger effort to shift trading relationships away from the United States in pursuit of “free and equitable” trade relations.
“If the United States no longer wants to lead, Canada will,” he said, outlining new relief measures for industries facing job losses, such as using tax revenue to support workers and businesses. “In this new world, we must look out for ourselves. Because we are Canadian, we will always look out for one another.”
The trade war coincides with Canada’s federal election campaign.
Carney’s incumbent Liberals have experienced a dramatic reversal of fortunes in recent weeks, owing largely to Trump’s actions. According to recent national polling, the party is likely to form a majority government in the coming weeks if support remains strong.
Conservative leader Pierre Poilievre promised on Thursday that if his party forms a government, he will “push hard to end the tariff madness” and “demand” a quick renegotiation of the North American Free Trade Agreement. The Tory leader announced plans to eliminate federal taxes on automobile purchases, saving families thousands of dollars.
Experts agree that sustained tariffs on the automotive sector, as well as steel and aluminum, would have the greatest impact in Ontario, the country’s economic engine and largest manufacturing base. One car plant in the border city of Windsor has already announced a two-week temporary shutdown, affecting more than 3,500 employees.
Prior to Carney’s announcement, Ontario’s premier, Doug Ford, who oversees an economy worth more than C$1 trillion, stated that he was a “strong supporter of showing the US that we negotiate through strength, not weakness”.
Ford told reporters that the consensus among premiers was that Canada “got the best of a bad deal” in Wednesday’s theatrical unveiling of global tariffs, but that the current levies on Canadian goods remained “totally unacceptable”.
