Donald Trump recently announced a significant 25% tariff on auto imports, declaring the move “permanent.” Canadian Prime Minister Mark Carney described this initiative as an “unjustified direct attack,” emphasising that Canada would fiercely defend its workers and industries. Before responding with countermeasures, Carney plans to review the specifics of Trump’s executive order. He is also set to return to Ottawa to lead a committee focused on relations with the US.
In response to the looming tariffs, Carney unveiled a C$2.23 billion fund intended to safeguard Canadian auto jobs that may be affected. The auto sector is crucial for Canada, employing around 125,000 people directly and supporting approximately 500,000 additional jobs in related fields. Carney assured auto workers that the Canadian government would stand by them.
This new tariff comes at a time when the US-Canada trade relationship is under strain, particularly as Trump has previously imposed tariffs on Canadian steel and aluminium. Carney expressed concern that Trump’s trade war could exacerbate economic pressure on US consumers, noting a recent dip in American consumer confidence to its lowest level since early 2021.
As the tariffs are poised to take effect soon, Canadian automakers face potential increases in costs and declines in sales, with the situation potentially destabilising not only the Canadian market but affecting US jobs in the auto industry. Ontario Premier Doug Ford warned that if the tariffs proceed, both Canadian and American auto plants might be forced to close simultaneously.
Carney is running a campaign that positions opposition to Trump as a central theme, particularly in light of the potential economic fallout from these tariffs. He underscored the intertwined nature of the US-Canadian auto industries, explaining that parts frequently cross the border multiple times before assembly.
Compounding tensions, Trump has made remarks suggesting Canada should consider becoming the “51st state,” a sentiment that has provoked considerable backlash among Canadians. This friction between the two countries has created an unusual situation where Carney, who took office on March 14, has not yet had a conversation with Trump, a rare occurrence for incoming leaders.
Carney has stressed the importance of dialogue, suggesting that given Trump’s recent actions, a conversation between them is overdue. Both nations are watching closely as the situation develops, given the significant economic implications that these tariffs could carry for both American and Canadian industries, particularly the auto sector, which plays a pivotal role in their economies.