Prime Minister Mark Carney said that Canada will match US President Donald Trump’s 25% car tariffs with a tariff on vehicles imported from the United States.
Mr Trump’s previously announced 25% tariffs on car imports took effect on Thursday.
The prime minister said he told Mr Trump last week in a phone call that he would be retaliating for those tariffs.
“We take these measures reluctantly. And we take them in ways that is intended and will cause maximum impact in the United States and minimum impact in Canada,” Mr Carney said.
Mr Carney said Canada would not put tariffs on car parts as Mr Trump has done, because he said Canadians know the benefits of the integrated auto sector.
The parts can go back and forth across the Canada-US border several times before being fully assembled in Ontario or Michigan.
Mr Carney said Canadians are already seeing the impact.
Automaker Stellantis said it shut down its assembly plant in Windsor, Canada, for two weeks from April 7, the local union said late on Wednesday.
The president of Unifor Local 444, James Stewart, said more scheduling changes were expected in the coming weeks.
Mr Carney said that will impact 3,600 workers that he met with last week.
Mark Carney said that Canadians are already seeing the impact of the tariffs (Adrian Wyld/AP) (Adrian Wyld/AP)
Autos are Canada’s second-largest export and the sector employs 125,000 Canadians directly and almost another 500,000 in related industries.
Mr Carney announced a “strategic response fund” worth two billion Canadian dollars (£1.08 billion) that will protect Canadian jobs affected by Mr Trump’s tariffs.
Mr Trump previously placed 25% tariffs on Canada’s steel and aluminium and Mr Carney said the country can expect further tariffs on pharmaceuticals, lumber and semi-conductors.
“Given the prospective damage to their own people, the American administration should eventually change course,” Mr Carney said.
“Although their policy will hurt American families until that pain becomes impossible to ignore, I do not believe they will change direction, so the road to that point may indeed be long. And will be hard on Canadians just as it will be on other partners of the United States.”
Donald Trump’s tariffs have been described as ‘unjustified, unwarranted and… misguided’ by the Canadian prime minister (Evan Vucci/AP) (Evan Vucci/AP)
Mr Carney, a former two-time central banker in Canada and the UK, said Mr Trump’s actions will reverberate in Canada and across the world.
“They are all unjustified and unwarranted and in our judgement misguided,” Carney said.
Canada’s initial 30 billion Canadian dollars (£16.2 billion) worth of retaliatory tariffs remain in place, having been applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Mr Carney suspended his election campaign to return to Ottawa to deal with Mr Trump’s tariffs.
Opposition Conservative leader Pierre Poilievre said he would remove the federal tax on Canadian-made vehicles.
Ontario Premier Doug Ford, whose province has the bulk of Canada’s auto industry, called Canada’s latest tariffs a “measured response”.