Prime Minister Mark Carney says Canada will be matching the United States' auto tariffs, effectively ending a 60-year agreement between the two nations.
Carney, who paused his election campaign on Tuesday to address a potential new wave of tariffs from U.S. President Donald Trump, made the announcement in Ottawa Thursday (April 3).
He said Canada would be implementing 25-per-cent tariffs on all vehicles imported from the U.S. that are not compliant with the Canada-United States-Mexico Agreement. Unlike the U.S. tariffs, Carney said Canada's will not affect auto parts "because we know the benefits of our integrated production system" and it will also not affect vehicle content from Mexico, "who is respecting the CUSMA agreement."
Carney added Canada is developing a framework for auto producers in Canada to get relief from these counter tariffs, as long as they maintain their production and investment in the country.
鈥淵esterday marked the latest in President Trump鈥檚 unprecedented series of U.S. tariffs that are designed to reshape the international trading system. The ambition of these measures is enormous, the effects on the global economy will be monumental.鈥�
He said the implementation of the auto tariffs mark the end of an era between the two countries. In 1960, Canada and the U.S. signed the auto pact agreement that ended auto tariffs between the countries that began "a 60-year period of close cooperation, partnership, job growth and prosperity in that era.
"That era has now ended, unless the United States and Canada can agree on a new comprehensive approach."
Carney said he received confirmation Wednesday that Trump's reciprocal tariffs would not be imposed on Canada. However the auto tariffs, and two other sets of tariffs, remain in place.
"So while it鈥檚 progress that further tariffs were not imposed on Canada yesterday, the president鈥檚 actions will reverberate here in Canada and across the world.鈥�
The auto tariffs, which went into effect Thursday, have already had an impact in Canada. Carney said workers from Unifor Local 444, who he met with while he was in Windsor on March 26, learned that their auto assembly plant would be shutting down for at least the next two weeks.
"That鈥檚 3,600 workers who are now out of work 鈥� not by their choice.鈥�
Carney said "every dollar" from Canada's counter tariffs, which could reach about $8 million before remission, will go directly to auto workers and the companies affected by the tariffs.
The prime minister also virtually met with provincial and territorial premiers Thursday to discuss Canada's coordinated response to the auto and reciprocal tariffs.
U.S.-imposed tariffs
The Canadian government says Canada and the U.S. have the "world's most comprehensive and dynamic trading relationship," with US$2.5 billion worth of goods going across the border every day.
There are currently three sets of tariffs imposed on Canada: auto tariffs, fentanyl and steel and aluminum.
鈥淲hile they have been imposed under different premises, some things are consistent. They鈥檙e all unjustified, unwarranted and, in our judgment, misguided and we are already seeing the consequences," Carney said.
The auto tariffs, announced by Trump on March 26, impose a 25-per-cent tariff on the import of automobiles and certain automobile parts. The tariff will be applied to imported passenger vehicles, light trucks, and key automobile parts, such a engines, transmissions, powertrain parts, and electrical components. There is also an option to expand the tariffs to additional parts, "if necessary."
On March 4, U.S. tariffs of 25 per cent on Canadian goods and 10 per cent on energy and potash exports from Canada to the U.S. came into effect. Then on March 12, the U.S. imposed tariffs of 25 per cent on Canadian steel and aluminum products.
In response, Canada announced its own countermeasures, including 25-per-cent tariffs on a valued $30 billion of goods imported from the U.S., reciprocal tariffs on a list of steel products worth $12.6 billion and aluminum products worth $3 billion.
