(March 28): Prime Minister Mark Carney says Canada will fight back against President Donald Trump’s trade war and his tariffs on the auto sector, but he declined to outline new retaliatory moves against the US on Thursday. 

The Canadian government will respond based on what the US administration does on April 2, the day Trump has promised to unveil another round of import taxes, Carney told reporters in Ottawa after holding an urgent meeting with a Cabinet committee that’s focused on Canada-US relations. 

Carney said Trump reached out to arrange a call and he expects that conversation to take place in the “next day or two.” The two leaders have not spoken since Carney was sworn in as prime minister on March 14.

“It’s clear that the US is no longer a reliable partner,” Carney said. “It is possible that with comprehensive negotiations, we will be able to restore some trust, but there will be no turning back. The next government and all that follow will have a fundamentally different relationship with the US.”

Canada has already imposed retaliatory tariffs on C$60 billion (US$41.9 billion or RM185.8 billion) of US products in response to Trump’s import taxes on an array of Canadian goods, including steel and aluminium. 

The government has threatened tariffs on a further C$95 billion in American items, including autos, as soon as next month. But Carney said he wouldn’t unveil any retaliation right now. It makes more sense to wait and see what other protectionist measures the Trump administration announces next week, he said. 

“We won’t back down. We will respond forcefully. Nothing is off the table to defend our workers and our country,” the prime minister said.

Trump signed an order Wednesday to implement a 25% tariff on auto imports starting at 12.01am Washington time on April 3. The order addresses the integrated nature of the sector in North America — giving some temporary wiggle room to automakers and to Canadian and Mexican manufacturers. 

The order says the 25% US tariff will apply to the value of non-US content in finished vehicles imported under the US-Mexico-Canada Agreement, and that USMCA-compliant car parts will remain tariff-free until a process can be established to tax their non-US content.

Still, the auto tariffs mark a significant expansion of Trump’s trade war with Canada and a hammer blow to the northern nation’s manufacturing business. The country shipped nearly C$50 billion of vehicles into the US market last year, and General Motors Co, Chrysler parent Stellantis NV, Toyota Motor Corp and others all have assembly plants in Ontario. 

Carney called an election for April 28, seeking a mandate from voters after he won a Liberal Party race to replace Justin Trudeau as the party leader and prime minister. Most polls put him in a tight contest with Pierre Poilievre’s Conservative Party, a stark change from earlier this year when the Conservatives led by about 20 points.

The prime minister said Canada must “fundamentally reimagine” its economy to reduce its reliance on the US and alter its international trade relationships. He pointed to his trip to Europe last week to shore up ties with France and the UK, as well as his pledge to eliminate trade barriers between provinces. 

“The old relationship we had with the US, based on deepening integration of our economies and tight security and military cooperation, is over,” Carney said. “What exactly the US does next is unclear. But what is clear is that we as Canadians have agency, we have power. We are masters in our own home.”

Carney has promised C$2 billion to help the Canadian auto sector strengthen its domestic supply chain, among other actions. He also said on Thursday that he is working with provinces to identify projects of national significance and accelerate the timeline for building them. 

“I don’t want to set unreasonable expectations,” he added. “The road ahead will be long. There is no silver bullet. There is no quick fix.”

Ontario Premier Doug Ford said he spoke with Commerce Secretary Howard Lutnick. Lutnick confirmed to him that the order means auto parts won’t be hit with an immediate tariff and that finished vehicles with US parts will face a tariff rate lower than 25%. A car with 50% US parts would face a tariff of 12.5%, Ford said.

Ford told reporters Lutnick did not give him any assurances there would be any easing or softening of the tariffs. 

When asked whether Lutnick knows what Trump is planning to announce on April 2, Ford said, “I think he has an idea.” Then the premier added: “Or maybe he doesn’t. That’s even scarier if he doesn’t. So let’s see what they come forward with on April 2, but we are prepared, we are ready.”

The premier said he has no plans “yet” to bring back his proposed export tax on electricity shipments, designed to cause financial pain to US states that buy the power. 

Canadian Trade Minister Dominic LeBlanc has also spoken with Lutnick about the auto tariffs and the two men committed to keep the lines of communication open, said a person familiar with the conversation. 

In a late-night Truth Social post, Trump threatened to slap additional tariffs on the European Union and Canada if they joined forces to cause “economic harm” to the US. 

Canada’s election is shaping up to be a contest over who is best to stand up to US aggression and reshape the national economy. Poilievre, campaigning in the Vancouver area, said that within four years of a Conservative government, “Canada will be completely rebuilt”.

“My message to President Trump is knock it off. Stop attacking America’s friends,” Poilievre said. “Start trading so that we can once again become richer, stronger and more secure on both sides of the border.”

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