Mark Carney says Canada to match vehicle tariffs in response to Trump levies

PM Carney announces a 25 per cent tariff on all U.S. vehicles not compliant with CUSMA, and every dollar raised will go directly to auto workers and businesses.

Prime Minister Mark Carney says Canada will match U.S. tariffs on vehicles that are not compliant with the North American free trade deal, following a First Ministers’ meeting Thursday morning.

“They are all unjustified, unwarranted, and in our judgment, misguided,” Carney said of the tariffs in Ottawa.

“And we are already seeing the consequences,” added Carney, whose election campaign was put on pause so the Liberal leader could address Trump’s tariffs.

On Wednesday, U.S. President Donald Trump laid out his long-promised reciprocal-tariff regime. While Canada escaped the taxes thanks to the Canada-U.S.-Mexico Agreement (CUSMA), a slate of other levies on Canadian products remain in place.

Levies on steel and aluminum took effect on March 12, and the 25 per cent tariffs on all non-CUSMA-compliant Canadian imports and 10 per cent on non-CUSMA-compliant Canadian energy, which had been twice delayed, are also in place. Those tariffs are related to border security and the fentanyl crisis, according to the president.

Plus, in effect as of midnight Wednesday, are Trump’s 25 per cent tariffs on all foreign-made automobiles, though the U.S. administration has yet to “establish(es) a process” to tax exclusively the non-American vehicle components of CUSMA-compliant products.

On Thursday, Carney announced Canada will respond with 25 per cent tariffs on all non-CUSMA-compliant vehicles imported from the U.S., and all non-Canadian content of CUSMA-compliant vehicles from the United States.

“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 told reporters on Parliament Hill.

Carney said Canada’s levies will not affect auto parts, “because we know the benefits of our integrated production system,” nor would they apply to vehicles from Mexico.

He added the federal government is working with auto producers to develop a framework to avoid the tariffs under certain conditions.

“Importantly, every single dollar raised from those counter-tariffs, which could reach around $8 billion before remission, will go directly to our auto workers and the companies affected by those tariffs,” Carney said.

Canada had already responded to Trump’s tariffs by imposing a 25 per cent tariff on $30 billion worth of U.S. goods, including items like 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.

According to the Prime Minister’s Office, more than 67,000 automobiles coming into Canada from the U.S. last year — which is about 10 per cent of the total — were non-compliant with the free trade agreement.

“We take these measures reluctantly, and we take them in ways that are intended, and will, cause maximum impact in the United States and minimum impact here in Canada,” Carney said of his government’s retaliation plan.

Canada, U.S. must ‘reset the overall relationship’

Carney said while he and Trump agreed to stay in touch as needed in the coming weeks, there’s currently no call between the two in the books.

In the meantime, he said, Canada should expand its trading partners and export markets.

“Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values,” he said. “We believe in international cooperation. We believe in the free and open exchange of goods, services and ideas. And if the United States no longer wants to lead, Canada will.”

On Thursday, Carney also repeated his previous assertion that the decades-old Canada-U.S. relationship is “over,” that Trump’s trade war is redefining it, and that the allies need to “reset the overall relationship.”

He said while that’s a “tragedy,” it’s the “new reality.”

Still, he said, Canada’s exemption from Trump’s reciprocal-tariff plan is not insignificant.

“With respect to an enormous series of trade measures that were announced yesterday, we have the best deal of a series of tough deals, bad deals, in many respects,” he said. “That is progress.”

“Yesterday’s actions by the U.S. administration, while not specifically targeting Canada, will rupture the global economy and adversely affect global economic growth,” Carney also said. “The global economy is fundamentally different today than it was yesterday.”

‘We got the best of a bad deal’: Ford

Ontario Premier Doug Ford — who also serves as the chair of the Council of the Federation of Canada’s premiers — said there’s agreement across provincial and federal governments that Canada got “the best of a bad deal” when it comes to Trump’s retaliatory tariffs.

Ford said while it was a “big relief” to be exempt from the reciprocal tariffs, Canada must still “negotiate through strength” to ensure all of the tariffs on Canadian products are eliminated.

Behind the scenes, several federal and provincial officials have 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.

When asked what he thinks of Carney’s tariff response, Ford categorized the plan as “fair.”

“I appreciate all the support across the country,” he said. “And it’s every premier. There’s no exclusions.”

“I’m glad to see the support of premiers out in the West as well, because I think it’s a measured response, and that’s what we need to do,” he added.

Poilievre, Singh lay out support plans

Both Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh weighed in on Trump’s tariffs from their respective campaign trails on Thursday.

Conservative Leader Pierre Poilievre — who’s said both countries should pause their tariffs so they can “rapidly renegotiate CUSMA” — said at a press conference Thursday morning there was “nothing constructive or productive” about Trump’s tariffs, citing Carney’s categorization of his previous phone call with the president.

He announced a Conservative government will eliminate the federal sales tax on Canadian-made automobiles, to save “cash-strapped Canadian families their hard-earned money,” and increase demand for domestically produced vehicles.

He’s calling on the premiers to scrap their portion of the sales tax as well.

According to the Trillium Network for Advanced Manufacturing — a non-profit at Western University that produces data-driven research — Canadian-made vehicles accounted for about nine per cent of the total domestic sales value in 2023.

Poilievre also promised a $3-billion “Keeping Canadians Working Fund,” which will disperse “temporary, targeted” loans for businesses affected by the tariffs, to help them keep employees on the job.

During a press conference in Ottawa on Thursday, Singh said an NDP government will bring in “Victory Bonds” in response to the tariffs.

“We’re going to need to raise money to be able to build the roads, the bridges, the infrastructure we need,” Singh said. “Instead of relying solely on banks and paying debt and interest to those banks, let’s pay interest to Canadians instead.”

When asked about the Federal government’s decision to discontinue the Canada Savings Bond in 2017 because the cost to administer the program was too high, Singh said, “We’re in a very different context right now.”

“We saw it when there’s a need, like during the war, the Canadians invested massively in Victory Bonds,” he said. “We are in a similar situation with a trade war.”

With files from CTV News’ Judy Trinh