Prime Minister Mark Carney of Canada has announced reciprocal tariffs on U.S.-made vehicles as President Donald Trump’s sweeping tariffs went into effect, sending shockwaves through the global financial system and straining international relations with Washington.
Trump imposed tariffs on 180 global trading partners on Wednesday, including punitive measures against 60 nations, sparking concerns about the risk they pose to the global financial system. Stock markets worldwide on Thursday plunged, including Wall Street, in response. Advertisement
Canada avoided the reciprocal tariffs, but previously announced 25% tariffs on Canadian-made automobiles went into effect on Thursday. In response, Canada was imposing a reciprocal 25% tariff on U.S.-made vehicles, Carney announced Thursday during a press conference.
“Yesterday marked the latest in President Trump’s unprecedented series of U.S. tariffs that are designed to reshape the international trading system,” he said, stating the tariffs will “rupture the global economy and adversely affect global growth.” Advertisement
The Canadian tariffs apply to fully fabricated U.S.-made vehicles that do not comply with the Canada-United States-Mexico Agreement. Auto parts, which frequently cross the U.S.-Canada border multiple times, are not affected.
Revenue generated from the Canada tariffs will be used to support Canadian auto workers and the domestic industry, which was already feeling the negative effects of Trump’s economic measures.
Unifor Local 444 said it has been notified by Stellantis that its Windsor, Ont., plant will be closed for at least two weeks starting Monday due to Trump’s tariffs, putting thousands of employees out of work.
“This has and continues to create uncertainty across the entire auto industry, Unifor Local 444 president James Stewart said in a statement announcing the plant’s closure. “This is not just affecting our plant — it’s impacting facilities in the U.S. and Mexico as well.”
The auto tariffs are the third batch from the United States to be imposed against Canada, after Trump imposed 25% tariffs on Canadian goods and 10% on energy and potash exports on March 4 and 25% tariffs on Canadian steel and aluminum products on March 14. A fourth round of 25% tariffs on certain automobile parts is expected to go into effect before May 3. Advertisement
“While they have been imposed under different premises, some things are consistent: They are all unjustified, unwarranted and in, our judgment, misguided and we are already seeing the consequences,” Carney said.
Trump, who has long used tariffs to address trade deficits, first announced he would hit Ottawa, as well as Mexico and China, with the economic punitive measures in November as president-elect over allegations that Canada permitted fentanyl and migrants to enter the United States through their shared border.
Though the number of drugs and migrants entering the United States is comparatively minuscule compared to its southern border, Canada has imposed measures to curb both, while also enacting counter tariffs against Washington.
In his remarks Thursday, Carney did not mince words in stating that the once-strong relationship between the United States and Canada has now been fundamentally altered.
“The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States that Canada has relied on since the Second World War — a system that, well, not perfect, has helped deliver prosperity to our country for decades — is over,” he said.
“our old relationship of steadily increasing integration with the United States is over. Advertisement
Describing the current state of the U.S.-Canada relationship and the global economic situation due to Trump’s tariffs a “tragedy,” Carney acknowledged that it is “also the new reality.” He stated that Canada will challenge the U.S. tariffs in court as illegal while strengthening deeper relations with other nations, including Mexico and Europe.
Trump’s tariffs against nearly all trading partners sent U.S. markets plummeting on Thursday, with the Dow Jones falling 4%, the S&P 500 nearly 5% and the Nasdaq Composite 6%.
The International Monetary Fund said in an statement emailed to UPI that it was still assessing the macroeconomic implications of the mass tariffs, “but they clearly represent a significant risk to the global outlook at a time of sluggish growth.”
“We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” IMF Managing Director Kristalina Georgieva said.
