Canadian Prime Minister Mark Carney stated that Canada’s old relationship with the United States, which was based on deepening economic integration and tight security and military cooperation, is now “over.”
Speaking to reporters in Ottawa after a cabinet meeting, Carney said that Canadians must “fundamentally reimagine our economy” in response to US President Donald Trump’s tariffs. He also confirmed that Canada would respond with retaliatory tariffs designed to have “maximum impact” on the United States.
Trump announced on Wednesday that he would impose a 25% tax on imported vehicles and vehicle parts, stating, “This is permanent.”
Carney, the leader of the Liberal Party, described the original Canada-US Automotive Products Agreement signed in 1965 as the most important deal of his lifetime, adding, “That’s finished with these tariffs.”
He further mentioned that Canada can sustain its auto industry despite US tariffs, provided that the government and business community work together to “reimagine” and “retool” the industry. He stressed the need for Canada to build an economy that Canadians can control, which would include rethinking its trade relationships with other partners.
It remains uncertain whether Canada can maintain a strong trade relationship with the United States in the future, he added.
Carney has altered his campaign plans ahead of next month’s general election to confront the new import duties. The US has already imposed a 25% tariff on Canadian goods, along with a 25% duty on all aluminium and steel imports. Canada has retaliated with about C$60bn ($42bn; £32bn) worth of tariffs on US goods.
The new car tariffs are set to take effect on April 2, with charges on businesses importing vehicles starting the next day. Taxes on vehicle parts will start in May or later.
On Thursday morning, Trump warned Canada and the European Union against collaborating against the US in the trade war. “If the European Union works with Canada to harm the US economically, large-scale tariffs, far larger than currently planned, will be placed on them both,” he posted on his Truth Social platform.
Carney met with his ministers in Ottawa on Thursday morning to “discuss trade options.” He had originally planned to campaign in Quebec. He also mentioned during the press conference that President Trump had reached out to him to schedule a call, which is expected to take place in the “next day or two.” If it happens, it would be the first call between the two heads of state.