Canada hits back with retaliatory tariffs on U.S. cars as trade war sucks up all the air in the election campaign
Canada “must respond with both purpose and force,” Prime Minister Mark Carney said in response to the U.S. tariff announcement.
THE CANADIAN PRESS/Sean Kilpatrick
In his dual role as Liberal leader and prime minister, Mark Carney again stepped into the national spotlight to outline Canada’s response as U.S. President Donald Trump escalated his trade war against Canada with devastating auto tariffs.
Saying Canada “must respond with both purpose and force,” Carney announced Ottawa is slapping $36 billion worth of retaliatory tariffs on all vehicles imported from the U.S. that are not compliant with the Canada-U.S.-Mexico (CUSMA) trade agreement. Tariffs will also be placed on the non-Canadian content of CUSMA-compliant autos from the U.S. But U.S. vehicle parts that are part of the cross-border supply chain are exempt.
The impact of the latest U.S. trade onslaught was felt immediately, with Stellantis idling about 6,000 workers as it paused production. And, although Canada was not slammed with the “reciprocal” tariffs announced globally by the White House Wednesday, Carney warned that more American tariffs may be coming on lumber, agriculture, pharmaceuticals and semiconductors.
It was the second time Carney has assumed his custodial prime minister’s role because of the trade crisis, and there is little doubt that the Liberal leader’s ability to take on that crucial responsibility during an election campaign focused on Trump’s threats has helped keep his party’s poll results climbing higher.
With the campaign at the one-third mark, the federal Liberals now have a 10-point advantage over the Conservatives, while Carney has opened up a 20-point lead over Conservative leader Pierre Poilievre when it comes to Canadians’ preferences for prime minister. A three-day rolling sample by Nanos Research ending April 3 has the Liberals at 45.5 per cent over the Conservatives at 36 per cent, with the NDP at nine per cent.
Nova Scotia Premier Tim Houston and B.C. Premier David Eby praised Carney for bringing down the heat a bit in Canada-U.S. relations, but Poilievre said Trump’s latest trade strike against Canada showed the Liberal leader’s discussion with the U.S. president last week amounted to nothing.
“Mark Carney said he had a very productive, very constructive call with President Trump, citing progress,” Poilievre said. “Unfortunately, Canada has not been spared. There is no progress, and there was nothing constructive or productive about Trump’s tariff announcement.”
‘Living in a new world now:’ Carney
Carney said Canadians are “living in a new world now” with a “fundamentally different” global economy.
“It will be hard on Canadians but I have no doubt we will rise to the challenge,” he said, adding that the country has rallied in the past in the face of seemingly insurmountable obstacles and can do it again.
Carney said the estimated $8 billion to be raised from Canada’s counter-tariffs will go towards providing relief to auto workers who lose their jobs and companies that suffer losses, on top of the promised $2 billion strategic relief fund he has promised if elected. The government will also develop a framework for auto producers in Canada to get federal relief from U.S. tariffs as long as they maintain production and investment in this country.
Carney, who has sought to solidify his reputation as a leader with international experience by recently visiting Britain and France as prime minister, noted Trump’s upending of world trade and said Canada is ready to lead an international coalition of countries that favour free trade. “If the United States no longer wants to lead, Canada will,” he said, adding Canadians will need to look to other countries and strengthen trade relationships amid its trade war with the U.S.
As stock markets and world leaders reacted negatively to the shock of Trump’s tariff attack on 185 countries, Carney mused about a possible decisive political backlash at some point in the U.S. “Given the prospective damage to their own people, the American administration should eventually change course – but I don't want to give false hope,” Carney said. “Although their policy will hurt American families, until that pain becomes impossible to ignore, I do not believe they will change direction. So the road to that point may indeed be long and it will be hard on Canadians, just as it will be on other partners of the United States.”
Like other Canadian political leaders, Carney said “the time has come to renegotiate our relationship with the United States.” Such a renegotiation, which would include trade and security issues, would take place after the election wraps up.
The U.S. an unreliable trading partner right now: Poilievre
Poilievre also called for a comprehensive renegotiation of bilateral relations with the U.S. He said he would demand Trump adhere to a “firm deadline” for the talks and that tariffs be paused while negotiators work out a new deal.
In any negotiations, Poilievre vowed to protect Canada’s territorial borders, resources, farmers in supply-managed agricultural sectors, fresh water and autoworkers.
Faced with the sustained Liberal upsurge in the polls, Poilievre shifted his campaign this week to talk more about confronting Trump. “I don’t consider the Americans to be a reliable trading partner right now,” he said Thursday. “Their president has chosen to betray America’s best friend and closest ally. I am saddened to say that because I love the American people, but there’s no denying that there is a president right now who consistently betrays the Canadian people and shows that he has been unreliable to deal with.”
To help the auto industry, Poilievre pledged to remove the GST from vehicles built in Canada. The Conservatives said waiving the GST on a qualifying $50,000 automobile would save the buyer $2,500. Poilievre also called on the premiers to waive their portion of the sales tax, a move he said would save up to $7,000 on the same qualifying vehicle. The tax cut would be temporary and would last for as long as U.S. tariffs on vehicles are in place.
NDP would create ‘Victory Bonds’ to raise capital, support economy
The NDP noted Thursday that the Conservative announcement was similar to NDP Leader Jagmeet Singh’s promise a week earlier to waive the GST on purchases of Canadian cars.
Singh said a government led by him would issue “Victory Bonds” to raise the money needed to strengthen the Canadian economy through the trade war with the U.S. The plan would see the federal government offer five- and 10-year bonds that Canadians can buy through a payroll deduction.
