Carney says Canada will match U.S. auto tariffs

CITYnews halifax / By Kyle Duggan, The Canadian Press

Prime Minister Mark Carney said Thursday that Canada will hit back against U.S. President Donald Trump’s 25 per cent auto tariffs with matching levies on vehicles imported from the United States.

At a press conference on Parliament Hill, Carney said Canada’s counter-tariffs will hit all vehicles that do not comply with the Canada-U.S.-Mexico Agreement, along with any non-Canadian content in compliant vehicles.

That means any vehicles made with less than 75 per cent North American content will face 25 per cent tariffs — a measure which could capture tens of thousands of vehicle imports, according to a background document provided by the Prime Minister’s Office. That could amount to roughly 10 per cent of all cars coming in from the U.S.

The counter-tariffs will not apply to vehicle content from Mexico or to individual auto parts.

Carney said the move could raise as much as $8 billion before any requests for tariff relief are factored in. All of that money, he said, will go directly to autoworkers and companies in Canada affected by the burgeoning trade war.

He called Trump’s tariffs on Canada unjustified, unwarranted and misguided — and warned that Trump’s overall campaign of trade hostility against countries around the world will “rupture” the global economy.

“Given the prospective damage to their own people, the American administration should eventually change course — but I don’t want to give false hope,” Carney said.

“Although their policy will hurt American families, until that pain becomes impossible to ignore, I do not believe they will change direction. So the road to that point may indeed be long and it will be hard on Canadians, just as it will be on other partners of the United States.”

Carney made the remarks on Parliament Hill after meeting with Canada’s premiers virtually to discuss Trump’s tariffs, and as Canadian automakers started to feel the effects those tariffs.

Unifor Local 444 announced Wednesday night that the Stellantis auto assembly plant in Windsor, Ont., will close down for at least two weeks and warned that the Trump tariffs are creating uncertainty across the entire industry.

Carney said he’s working on a “framework” to offer auto producers in Canada relief from the counter-tariffs.

The prime minister also spoke with German Chancellor Olaf Scholz on Thursday about deepening economic ties and Canada’s plan to fight back against Trump’s trade hostilities.

On Wednesday, Trump confirmed he is going ahead with 25 per cent tariffs on automobile imports starting Thursday, which were added to existing 25 per cent tariffs on all steel and aluminum imports into the U.S., including from Canada.

He also unveiled a 10 per cent baseline tariff on imports from most countries and a lengthy list of higher tariffs dozens of countries will face. But a White House fact sheet said goods imported under the CUSMA free-trade pact will not face tariffs, although imports that fall outside of it will be hit with 25 per cent levies.

Both Canada and Mexico remain under the threat of economywide duties Trump has linked to the flow of fentanyl across the borders.

In early March, Trump imposed — and then partially paused — those 25 per cent across-the-board tariffs on Canada and Mexico, along with a lower 10 per cent levy on energy and potash.

The retaliatory tariffs on autos announced Thursday are being added to Canada’s initial $30-billion response to Trump’s first tariff moves, and its $29.8 billion response to Trump’s steel and aluminum tariffs.

Trump’s trade war has forced all parties campaigning in the general election to adjust their messages.

Conservative Leader Pierre Poilievre vowed Thursday to take the GST off all new Canadian-made cars as long as Trump’s auto tariffs stay in place.

“No, I don’t consider the Americans to be a reliable trade partner right now,” he said. “Their president has chosen to betray America’s best friend and closest ally. I’m saddened to say that because I love the American people, but there’s no denying that there is a president right now who consistently betrays the Canadian people and shows that he has been unreliable to deal with.”

NDP Leader Jagmeet Singh proposed issuing “victory bonds” to help Ottawa raise funds to fight back against Trump’s tariff threats, similar to bonds issued during both world wars to fund the war effort.

He said Canadians are “wrapping themselves in the flag” and looking for ways to do their part. He said the bonds could boost the economy, with every dollar raised put toward domestic infrastructure projects.