Canadian Prime Minister Mark Carney announced on Thursday that Canada will impose a 25% tariff on U.S. auto imports that don’t meet the standards of the U.S.-Mexico-Canada Agreement (USMCA) on free trade.
Carney explained that this move is a response to President Trump’s 25% auto tariffs, which took effect the same day.
“As I told President Trump during our call last week, Canada will respond to the U.S. auto tariffs. And today, I’m announcing that the Government of Canada will be responding by matching the U.S. approach,” Carney said in a press conference on Thursday.
He clarified that the tariff will not apply to auto parts or to imports from Mexico. “Our tariffs, though, unlike the U.S. tariffs, will not affect auto parts because we know the benefits of our integrated production system, and they will also not affect vehicle content from Mexico, who is respecting the CUSMA agreement,” he added.
Carney also stated that the tariffs are expected to bring in about $8 billion, and all the money raised will go directly to Canadian auto workers and companies impacted by the U.S. tariffs.
The announcement came a day after President Trump revealed his largest set of tariffs yet, including a 10% baseline tariff on imports and higher tariffs on several countries. Notably, Canada and Mexico were not on the list of new tariffs.
“While it’s progress that further tariffs were not imposed on Canada yesterday, the president’s actions will reverberate here in Canada and across the world,” Carney said.
He also warned about the global consequences of Trump’s tariffs, saying they could harm the global economy. “The global economy is fundamentally different today than it was yesterday,” Carney explained. “The system of global trade, anchored on the United States, that Canada has relied on since the end of the Second World War — a system that, while not perfect, has helped to deliver prosperity for our country for decades — is over.”
Carney also pointed out that the U.S. no longer seems committed to leading global economic efforts, which could change Canada’s approach. “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over,” he said.
Looking ahead, Carney pledged to secure the best possible deal for Canada under the current trade landscape. But he also stressed the need to expand trade with other countries to protect Canada’s economy and sovereignty.
“Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values,” Carney said. “We believe in international cooperation. We believe in the free and open exchange of goods, services, and ideas.”
“If the United States no longer wants to lead, Canada will,” he added.
