Prime Minister Mark Carney of Canada has stated that the country must rethink its economy in response to escalating tariffs from U.S. President Donald Trump, declaring that the “old relationship” between Canada and the U.S. is over. Carney has promised to implement retaliatory measures, reduce internal trade barriers, and move Canada’s economy away from reliance on the U.S. The new auto tariffs announced by Trump will begin next week, prompting Carney to call for a reimagining of Canada’s economy over the coming months and years.
Carney has not yet spoken to Trump since becoming prime minister but plans to do so in the next day or two after Trump reached out to schedule a call. Carney has put his election campaign on hold to chair a cabinet committee meeting to discuss Canada’s response to the new tariffs from the Trump administration. He has reiterated his commitment to removing federal limits on internal trade by July 1 if re-elected, as well as taking steps to boost domestic investment and protect Canada from attempts to weaken or break the country economically.
The new auto tariffs set to go into effect on April 2 will not apply to U.S.-made parts in foreign-made vehicles, according to the executive order signed by Trump. These tariffs are in addition to existing tariffs on Canadian goods, as well as tariffs on steel, aluminum, and energy imports from Canada. Industry groups have warned of immediate consequences for Canada’s auto sector, noting the highly integrated North American supply chain that will be disrupted by the new tariffs.
Carney referenced plans he had announced while campaigning as Liberal leader, such as establishing a complete auto manufacturing network in Canada and creating a $2-billion strategic response fund to protect Canadian workers and shift away from U.S. supply chains. He has also promised to support workers and diversify the domestic economy through various initiatives. Canada has already responded to Trump’s trade actions with counter-tariffs on American goods, and another round targeting $125 billion worth of U.S. goods is set to begin on April 2.
Conservative Leader Pierre Poilievre has criticized Trump’s tariffs and urged him to stop attacking America’s friends. He has proposed dollar-for-dollar tariffs aimed at maximizing impact on American companies while minimizing impact on Canadian consumers. NDP Leader Jagmeet Singh has called Trump’s tariffs a betrayal and a gut punch, stating that Canada needs to fight back. Singh has pledged Employment Insurance benefits to cover wages and proposed waiving the GST off Canadian vehicles to encourage people to buy local.
The escalating tariffs and threats to Canada’s sovereignty from Trump have become a key focus for the main federal parties in the 2025 election campaign. Carney has rejected Trump’s threats and stated that his government will use every dollar collected from retaliatory tariffs to protect Canadian workers. The Liberal Party, Conservatives, and NDP are all proposing different strategies to respond to Trump’s trade actions, emphasizing the importance of protecting Canadian workers and the economy.
