Carney Vows Retaliation as Trump’s Auto Tariffs Push Canada to Seek a New Trade Partner

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Prime Minister Mark Carney of Canada issued a stern rebuke of President Trump’s sweeping auto tariffs on Thursday, declaring the United States was no longer a dependable trade partner. His announcement came as the U.S. confirmed a 25% tariff on imported cars and parts, triggering immediate market disruption and global concern over escalating trade tensions.

Carney described the new tariffs as a “direct attack” on Canada’s economy and a violation of existing trade agreements. At a press conference in Ottawa, he said Canada would move to lessen its reliance on its southern neighbor, forging deeper relationships with countries like France and the United Kingdom instead. “The old relationship we had with the United States is over,” Carney said. “It’s clear the U.S. is no longer a reliable partner.”

Economic Fallout Across Borders

The tariffs, set to take effect April 3, will impact all car and truck imports into the U.S. along with parts deeply embedded in the North American supply chain such as transmissions and engines. Even American-branded vehicles assembled in Canada or Mexico will face penalties, with duties applied based on non-U.S. content. Trump’s surprise escalation through social media only heightened tensions. In a post on Truth Social, he threatened far larger tariffs on Canada and the European Union if they acted together “to do economic harm” to the U.S.

Market responses were swift. Shares of General Motors fell more than 7 percent, with Ford and Stellantis also sliding. Global automakers in Germany, Japan, and South Korea were among the hardest hit as industry leaders warned of possible shutdowns in the event of prolonged disruption. Flavio Volpe, president of the Automotive Parts Manufacturers Association of Canada, warned that production in both countries could halt within days if supply chains are severed.

Canada Plans Retaliation and Realignment

Carney announced that retaliatory tariffs would be revealed after the White House confirms its next steps, expected by April 2. Ottawa has signaled it’s ready to impose as much as C$155 billion in countermeasures. “We will respond forcefully. Nothing is off the table,” Carney stated, emphasizing the urgency of defending Canadian workers and sovereignty.

The prime minister also hinted at a strategic realignment. “We must fundamentally reimagine our economy,” he said. “We’ll need to pivot our trade relationships elsewhere and do things previously thought impossible.” Carney’s first international trip will be to France and the U.K. The chosen destinations signaled a broader shift away from a U.S.-centric trade model.

Canadian mayors, premiers, and labor leaders voiced support. Unifor president Lana Payne warned Trump not to expect open access to Canadian markets while undercutting its economy. Ontario Premier Doug Ford, after speaking with U.S. Commerce Secretary Howard Lutnick, remained skeptical of reassurances that plants would stay open. “Trust but verify,” he said.

A Global Chain Reaction Begins

Mexico and South Korea have also voiced concern, with Mexican President Claudia Sheinbaum promising to unveil her country’s response after April 2. Meanwhile, European leaders pushed for last-minute diplomacy to avoid a global trade war. Despite those efforts, Trump appears committed to expanding the tariffs. His administration is targeting five key sectors: autos, lumber, steel and aluminum, semiconductors, and pharmaceuticals.

The stakes are high in these budding trade wars. The U.S. imported $214 billion in passenger cars in 2024, and nearly 60 percent of car parts used in American factories come from abroad. As a result, a sharp rise in consumer prices is now likely. For example, the cost for a new pickup truck could jump by $8,000 under the new rules. Meanwhile, Carney maintained that Canada’s future lies in resilience, not submission. “We are masters in our own home,” he said, rejecting any notion that Canada could be pressured into economic compliance.

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