Canada exempt from Trump’s sweeping reciprocal tariffs, PM Carney promises countermeasures to auto, sectoral levies

President Donald Trump waves after an event to announce new tariffs in the Rose Garden at the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Mark Schiefelbein)

Canada will be exempt from the sweeping reciprocal tariffs U.S. President Donald Trump is implementing on most other countries, though 25 per cent tariffs on some Canadian goods remain in place, and 25 per cent tariffs on all foreign-made automobiles are coming into effect as of midnight.

Prime Minister Mark Carney — who put his election campaign on pause to meet with his Canada-U.S. Relations Council and cabinet to craft a response to the tariffs — told reporters on Parliament Hill the federal government will “act with purpose and with force” during this crisis.

Trump laid out the details of his long-anticipated reciprocal-tariff regime in the White House Rose Garden on Tuesday afternoon.

“Reciprocal. That means they do it to us and we do it to them,” Trump said. “Very simple. Can’t get any simpler than that.”

“It’s our declaration of economic independence,” the president also said, before continuing to address the crowd while holding a chart listing the tariffs other countries have in place on American products.

Canada was not listed on the board.

The president also said he’d establish a “minimum baseline tariff” of 10 per cent on other countries, without specifying which ones. A fact sheet from the White House, however, does not list either Canada or Mexico as countries that will be subject to the 10 per cent baseline tax.

“Reciprocal tariffs, again, reciprocal, back and forth, back and forth,” Trump said. “And I call this ‘kind reciprocal.’ This is not full reciprocal. This is ‘kind reciprocal’.”

“But what we do is we cut it in half. We charge them,” he added. “My answer is very simple. If they complain, if you want your tariff rate to be zero, then you build your product right here in America, because there is no tariff.”

The commander-in-chief has repeatedly referred to the April 2 as “Liberation Day” for the American trade system, what he sees as a reset to the trade imbalance with much of the globe, and a plan to drive manufacturers back to America.

“April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” Trump said Wednesday.

The reciprocal tariffs will be stacked on a series of other Trump-imposed levies, including 25 per cent on foreign-made automobiles, of which Canadian vehicles will be exempt until U.S. administration “establish(es) a process” to tax exclusively the non-American vehicle components of Canada-U.S.-Mexico Agreement (CUSMA)-compliant products.

Levies on steel and aluminum — which took effect on March 12 — are also in place.

A second month-long reprieve on 25 per cent levies on all Canadian imports and 10 per cent on Canadian energy — which are related to border security — also expired Wednesday. Those apply to all non-CUSMA-compliant goods.

So far, Canada had responded to Trump’s tariffs by imposing a 25 per cent tariff on $30 billion worth of U.S. goods, including items such as orange juice, wine and spirits. The federal government has said those retaliatory measures will remain in place until the U.S. lifts all of its tariffs on Canadian products.

Canada has also pushed back on Trump’s steel and aluminum tariffs with similar duties on an additional $30 billion worth of American steel and aluminum products, along with additional imported goods.

Carney said Canada will be “very deliberate” with its countermeasures.

“We, of course, will be looking with interest what is announced tomorrow, as I also mentioned to the president, and was very clear, we will respond to additional measures,” he said, following a factory tour in Winnipeg on Tuesday. “So we will put in place retaliatory measures if there are additional measures put against Canada tomorrow.”

Ahead of Trump’s address, Carney convened a virtual meeting of business and union leaders who are part of the Canada-U.S. Relations Council. Following Trump’s executive-order signing in the Rose Garden, Carney also convened his cabinet, but the specifics of Canada’s tariff response were not unveiled on Wednesday.

Carney will convene a meeting of Canada’s premiers on Thursday morning.

“President Trump has just announced a series of measures that are going to fundamentally change the international trading system,” Carney told reporters on his way into the cabinet meeting. “Now, in doing so, he has preserved a number of important elements of our relationship — the commercial relationship between Canada and the United States. But the fentanyl tariffs still remain in place, as do the tariffs for steel and aluminum.”

“As of this evening, the tariffs on automobiles will enter into force, and the U.S. has signalled that there will be additional tariffs in so-called strategic sectors, pharmaceuticals, lumber and semiconductors,” he also said, adding Canada will “fight these tariffs with countermeasures.”

According to a source inside the Prime Minister’s Office (PMO), the government did not expect to get advanced warning of which sectors or products Trump would target.

Behind the scenes, several federal and provincial officials said they were caught off guard last week, as earlier talks with the White House had left them with the impression that Canada would receive some form of tariff exemption on automobile manufacturing.

The PMO source, who is not authorized to speak publicly, also said Carney would not come out with an immediate response to Trump’s latest round of tariffs.

“The Prime Minister may wait a day before he responds,” the source said, so the government can assess how best to target its trade actions to “hit the U.S. with maximum impact while limiting pain on Canadians.”

Recession in Canada ‘hard to avoid’: former BoC governor

While Canada is so-far unaffected by Trump’s new reciprocal tariffs, many other countries were targeted at varying rates. China, for example, will see a 34 per cent tariff rate, while the European Union will see a 20 per cent rate.

According to former Bank of Canada governor Stephen Poloz, the ripple effects of those tariffs and potential countermeasures will make the chances of a recession in the U.S. “pretty high.”

“(Consumers have) already been working through a very tough cost of living shock from the post-pandemic period,” Poloz said in an interview with CTV’s Power Play on Wednesday. “So I think this will only reinforce that feeling of angst down the bottom part of the U.S. economy.”

“We may have to go through a U.S. recession, and of course, many countries, perhaps the world, will have a recession,” Poloz added.

When asked by host Vassy Kapelos how Canada will be impacted by Trump’s global reciprocal tariffs, Poloz said “it’s too early to make calls like that,” but also emphasized it would be “hard to avoid if there is a global recession.”

U.S. senators challenge tariffs targeting Canada

A bipartisan group of U.S. senators, meanwhile, led by former Hillary Clinton running mate Sen. Tim Kaine, voted in favour of a resolution on Wednesday evening to undo Trump’s border-related tariffs on Canadian products.

“No one is denying that there’s a fentanyl challenge in the United States, a huge challenge,” Kaine told reporters earlier on Wednesday.

“You might argue about whether the emergency is one where tariffs is the right answer, but clearly, the fentanyl trade is being heavily driven through Mexico or precursor chemicals from China, but Canadian tariffs are not the answer, because the fentanyl problem is not primarily a Canadian problem,” Kaine added, pointing to the amount of fentanyl seized at the U.S. northern border, compared to its southern one.

“But this is not about fentanyl. It’s about tariffs,” Kaine also said. “It’s about a national sales tax on American families.”

Taking the U.S. Senate floor, bill co-sponsor Republican Sen. Rand Paul said the tariffs on Canada are unconstitutional and that the president does “not have the power to legislate” without consent from Congress, according to the U.S. “founding fathers.”

“This isn’t about political parties. I voted for and supported Trump, but I don’t support the rule of one person,” he said.

Poilievre, Singh weigh in from campaign trails

Ahead of Trump’s announcement, both Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh weighed in on the tariff threat from their respective campaign trails on Wednesday.

Singh, calling the president “a storm” and “an arsonist,” said an NDP government would prioritize support for workers impacted by the tariffs, including a pledge to boost employment insurance, and to give all money collected from counter-tariffs to workers and communities hit the hardest.

Poilievre reiterated on Wednesday that Canada will “obviously never be the 51st state,” amid ongoing threats from Trump to annex the country.

Poilievre also said Canada needs a “strong and effective” plan, which he broke down into three parts: an immediate response, to end the dispute “after the election,” and “a long-term plan to build our economic fortress in Canada.”

“We should set a firm date to finalize a new deal, and I will propose that both countries pause tariffs while we hammer out that deal,” Poilievre said. “Keeping destructive tariffs in place kills jobs on both sides of the border, and so it serves no purpose at all.”

Late last month, Carney announced his government will roll out a $2-billion strategic response fund to help the auto sector, if the Liberals win the election.

With files from CTV News’ Stephanie Ha, Lynn Chaya, and Judy Trinh

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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect today, a day he has proclaimed as “Liberation Day” for American trade. CTV News has extensive coverage across all platforms:

• CTVNews.ca has in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
• CP24.com has developments out of Queen’s Park and what the tariffs mean for the people of the GTHA.
• BNNBloomberg.ca has what this means for the business community, investors, and the market.