Tariff Tensions Escalate: Canada Retaliates Against US
As the Trump administration enforces its extensive global tariffs, former US trading partners are devising retaliatory measures, set to significantly impact American consumers’ finances.

On Thursday, Canada’s newly elected Prime Minister, Mark Carney, announced a 25% tariff on US-manufactured automobiles. The tariffs will apply to vehicles that do not comply with the USMCA, a trade agreement between Canada, Mexico, and the US signed into law several years ago. However, the tariffs will not apply to car parts. Carney estimates that Canada will generate approximately $5.7 billion from these new measures.

The US has already imposed multiple tariffs on Canada, including on the nation’s steel and aluminum, as well as Canadian exports. Although Canada and Mexico were exempt from the far-reaching tariffs Trump announced this week, dubbed "reciprocal tariffs", the previous measures remain in effect.

During a press conference, Carney stated, "Our response to these latest tariffs is to fight, to protect, and to build. We will fight the US tariffs with retaliatory trade actions of our own that will have maximum impact in the United States and minimum impacts here in Canada." He added, "We take these measures reluctantly… We can do better than the United States. Exactly where that comes out depends on how much damage they do to their economy."

Carney pointed out that Trump is effectively violating the trade agreement his administration negotiated during his first term in office. The USMCA was implemented in 2020, towards the end of Trump’s first tenure at the White House. Carney also emphasized that Trump’s trade war would ultimately harm many Americans and predicted that the tariffs would eventually be rescinded.

"Given the prospective damage to their own people, the American administration should eventually change course," 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."

Carney expressed pessimism about US-Canadian relations, stating, "The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States… is over. Our old relationship of steadily deepening integration with the United States is over. The 80-year period when the United States embraced the mantle of economic leadership…is over." He added, "This is a tragedy. It is also the new reality. We must respond with both purpose and force."