OTTAWA—Canadian Prime Minister Mark Carney announced a limited but strategic set of counter-tariffs against the United States on Thursday in direct response to President Donald Trump’s auto tariff policy. Carney called it a “tragedy for global trade.”
Carney revealed that Canada will implement a 25% tariff on U.S.-made vehicles that fail to meet the terms of the U.S.-Mexico-Canada Agreement (USMCA). However, auto parts and vehicles with content from Mexico will be exempt to minimize domestic impact and maintain regional trade flow.
“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 during a press briefing in Ottawa.
Strategic Tariff Response Aimed at Pressuring U.S. Compliance
Carney explained that this measured response mirrors the U.S.’s own tariff policies but is carefully calibrated to protect Canadian manufacturing and maintain regional supply chains. Canada’s previously announced tariffs remain intact, reinforcing its position in the North American trade dispute.
Market Fallout as Tariff Shockwaves Spread
Trump’s new 10% baseline import tariff, which escalates significantly for certain countries, immediately triggered market instability. Investors dumped risky assets, fearing that the U.S. is dismantling decades of global trade cooperation.
“The 80-year period when the United States embraced global economic leadership… is over. This is a tragedy,” Carney declared, highlighting the long-term geopolitical consequences of Trump’s isolationist trade stance.
Canada’s Trade Strategy Moving Forward
The Canadian government is expected to continue building alliances with international partners and diversify trade beyond U.S. dependence. With industries such as automotive, energy, and agriculture at stake, Canada is under pressure to protect domestic jobs while navigating an increasingly unstable global trade landscape.
