By Paul Vieira
OTTAWA--Canadian Prime Minister Mark Carney said Wednesday that President Trump's "unjustified" 25% tariff on imported automobiles and some auto parts will damage the country's economy.
Carney said he would be meeting with ministers of the U.S.-Canada cabinet committee Thursday to explore trade options, including retaliatory tariffs against U.S. products. Ontario Premier Doug Ford, whose province is home to the bulk of the country's auto sector, said he would encourage the prime minister to slap tariffs on U.S.-made vehicles.
"This will hurt us," Carney said, ahead of a scheduled election-campaign rally in Kitchener, Ontario. He said the tariffs are a "direct attack" on the country's workers and companies, and that Trump has "betrayed" the North American trade deal he renegotiated during his first term in office, which is also known as USMCA. "We will defend our workers, we'll defend our companies, we'll defend our country."
This marks one of Carney's first tests as prime minister in countering Trump, whose threat of hefty tariffs and the accompanying uncertainty has pierced business and consumer confidence in the country. Wednesday marked the fourth day of an election campaign that Carney called, with a national vote set for April 28. He is positioning himself as an experienced hand, leading two major central banks on two continents during periods of financial tumult, that the country needs in this new economic crisis.
According to the White House, the 25% tariff will apply, starting next month, to all imported passenger vehicles and light trucks, as well as important auto parts such as engines, transmissions and electrical components. Importers of vehicles produced in either Canada or Mexico under the terms of USMCA will have to pay the hefty tariff on non-U.S. content used in the automobile or light truck. For the time being, the White House said, USMCA-compliant auto parts will be exempt from the 25% tariff, pending further direction from the Department of Commerce.
One of the wrinkles that the U.S., Mexico and Canada agreed to, at the behest of Trump's first administration, in USMCA was an increase in the minimum level of North American content required in a vehicle to qualify as duty free.
Trump's auto tariff "is a significant action. It's entirely unjustified. It's entirely inconsistent with USMCA, and indeed, the long history of relations in the auto sector," Carney said.
BMO Capital Markets estimates that the auto sector accounts for about 160,000 jobs, or 7% of all employment linked to U.S.-Canada trade.
Earlier Wednesday, at a campaign stop in the border city of Windsor, Ontario, Carney said that, pending an election victory, he would create a billion-dollar-plus fund to help the country's auto sector deal with fallout from the Trump administration's trade policy. The money would also help steer toward an "all-in-Canada" auto manufacturing network, which he said would limit the number of times parts made in Canada and used in auto assembly cross the U.S.-Canada border.
During another campaign stop this week, Carney said that export taxes on key Canadian commodities, such as energy and agricultural products, was a retaliatory option for Ottawa in the event the White House escalates the crossborder trade conflict. To date, Canadian officials have retaliated with a 25% tariff on about $42 billion worth of imports from the U.S., and that duty may expand to an additional $66 billion of U.S. goods.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
March 26, 2025 20:32 ET (00:32 GMT)
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