Canada announces countermeasures to Trump's tariffs

Friday, April 4th 2025 - 09:36 UTC

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“Their policies will hurt American families, until that pain becomes impossible to ignore,” Carney foresaw

Canadian Prime Minister Mark Carney announced Thursday that his country would impose 25% tariffs on US-made automobiles in response to President Donald Trump’s 25% tariffs on Canadian autos as part of his “Liberation Day” measures.

“We will fight these tariffs with countermeasures,” Carney stressed. Trump's tariffs “will fundamentally change the global trading system” and “directly affect millions of Canadians,” he added.

“We took these steps reluctantly. And we took them with the intention of causing the maximum impact in the United States and the minimum impact in Canada,” he also pointed out.

“During this crisis, we must act decisively and forcefully. My government will fight US tariffs, protect Canadian workers and industries, and build the strongest economy in the G7,” Carney further noted.

The US tariffs target Canada’s second-largest export sector, employing 125,000 directly and nearly 500,000 in related industries. Carney’s countertariffs will apply to non-Canadian components of US vehicles compliant with the USMCA (T-MEC/CUSMA) trade agreement and fully to non-compliant vehicles, while sparing auto parts and Mexican-made cars.

Carney emphasized minimizing domestic impact while maximizing pressure on the US, with tariff revenue—potentially $8 billion—redirected to support Canadian autoworkers and companies.

The US tariffs have already triggered Stellantis to pause production at its Windsor, Ontario plant (3,200 layoffs) and in Mexico (2,600 layoffs), alongside 900 US layoffs.

Carney anticipates further US tariffs on Canadian lumber, pharmaceuticals, and semiconductors, vowing a strong response. He criticized the tariffs as “unjustified” and warned of global economic disruption, including potential recessions in both countries.

“Their policies will hurt American families, until that pain becomes impossible to ignore,“ Carney foresaw. But ”I do not believe they will change direction.”

Canada is seeking new trade partners to offset export losses while maintaining existing tariffs on US steel and aluminum. Despite the trade war, Canada and Mexico retain some exemptions under USMCA, though experts predict inflationary pressures and reduced auto sales.