Trump’s auto tariffs forces Carney response, attempt to bolster economic credentials in election battle

Take that!

Canada is hitting back with everything it has — which isn’t admittedly very much — at Donald Trump’s latest round of tariffs, as the US president’s decision to impose a 25% levy on imported vehicles throws the North American auto industry into turmoil. 

Acting as prime minister, Liberal leader Mark Carney on Thursday announced that Canada will match the US auto tariffs with its own 25% duty on American-made vehicles that fail to comply with the Canada-U.S.-Mexico Agreement (CUSMA). 

The move signals Canada’s willingness to fight back against Trump’s aggressive trade policies, while also positioning Carney — an economist and former Bank of Canada governor — as the leader best equipped to navigate the crisis in the midst of an election campaign.

Carney, speaking after a meeting with Canada’s premiers, condemned Trump’s move as “unjustified, unwarranted, and misguided,” warning that escalating trade tensions could “rupture” the global economy.

“If the United States no longer wants to lead, Canada will,” he declared, urging Canadians to brace for difficult but necessary economic choices.

He vowed to protect Canadian auto workers and supply chains, saying his government is preparing a relief framework for domestic manufacturers affected by the tariffs. 

The economic fallout was swift. Automaker Stellantis announced temporary shutdowns at its Windsor, Ontario, and Toluca, Mexico, plants in response to the tariffs. 

The Windsor plant will pause production for at least two weeks in April, impacting Canadian auto workers, while the Mexican facility will be idled for the entire month. 

The move also triggered temporary layoffs at US plants in Michigan and Indiana, highlighting how deeply integrated North America’s supply chains are, and how disruptive Trump’s tariffs could become.

The response from Conservative Leader Pierre Poilievre was sharply critical of Carney’s handling of the situation. 

While campaigning in Kingston, Ontario, Poilievre announced that he would eliminate the federal sales tax on Canadian-made vehicles to incentivize domestic production. He also vowed to “demand” an immediate renegotiation of the Canada-US-Mexico trade agreement (CUSMA) if elected, arguing that Carney’s approach was too passive. 

“On my first day as prime minister, I will call the president and demand we rapidly renegotiate CUSMA,” Poilievre said.

While Canada was spared from Trump’s initial round of tariffs, it is now clear that the trade war is no longer just an abstract policy debate — it is fast becoming the defining issue in the Canadian election, and one that could make or break Carney’s bid for power.

“Trump beating on Canada more gives Carney a better shot of winning because he's the guy that can manage an economic crisis and also because the Canadians are so united in their anger with the United States,“ US political analyst Ian Bremmer on his GZero podcast. 

“So Trump is definitely a uniter, just not inside the US, more inside other countries.”