Canadian Prime Minister Mark Carney announced on the 3rd (local time) that Canada will impose a 25% 'retaliatory tariff' on American-made cars in response to the Trump administration's 25% auto tariff.
According to AP News and others, Prime Minister Carney said at a press conference that day, "We will take measures that have the maximum impact on the United States and minimal impact on Canada, as intended."
However, just as the Trump administration exempted products covered by the United States-Mexico-Canada Agreement (USMCA) from tariffs, Canada also excluded USMCA-covered products from the tariff list. Auto parts were also excluded from the new tariff imposition.
Carney also stated that Canada will maintain the previously imposed retaliatory tariffs.
Carney said, "The U.S. administration will eventually have to change direction considering the potential harm to its own citizens," adding, "I think they will not change direction until the pain inflicted on American households reaches an undeniable level." He continued, "Therefore, the path to that point could be very long," and added, "It will be a great difficulty for Canada, as well as for other U.S. trading partners."
He went on to say, "For the past 80 years, the United States has exercised global economic leadership, strengthening alliances based on trust and mutual respect while advocating for free and open trade. Now, that era is over."
The day before, President Trump signed an executive order imposing high reciprocal tariffs on trading countries worldwide. Canada and Mexico were excluded from the reciprocal tariff imposition on that day.
Previously, the Trump administration imposed a 25% tariff on Canada and Mexico citing reasons such as drugs and illegal immigration. However, products compliant with USMCA remain exempt from tariffs. Also, starting at 12:01 a.m. that day, a 25% tariff began to be imposed on all cars produced outside the United States. Major parts such as engines were announced to be subject to a 25% tariff before the 3rd of next month.
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