Canada Fires Back at Trump’s Auto Tariffs with Trade Moves of Its Own
Canadian Prime Minister Mark Carney isn’t backing down from U.S. President Donald Trump’s latest trade move. If Trump follows through with his plan to slap a hefty 25% tariff on imported cars and light trucks, Carney says Canada will hit back with its own countermeasures.
“We’re not going to sit idly by while these tariffs hurt Canadian jobs and businesses,” Carney said in a press conference. He promised that any Canadian response would be designed to hit the U.S. hard while minimizing damage at home. The exact details? He’s holding off until next week when Trump’s tariffs are set to kick in.
And it’s not just Canada gearing up for a fight. European nations are threatening their own retaliation, with German Chancellor Olaf Scholz calling Trump’s trade moves a lose-lose situation for everyone. France and Britain are also looking at ways to strike back, including reviewing subsidies for Tesla, which is led by Trump ally Elon Musk.
Car Prices Set to Skyrocket
If Trump’s tariffs go into effect, car buyers in the U.S. are in for some serious sticker shock. Analysts predict new car prices could jump by $4,000 to $5,300. Ferrari has already announced it’s raising prices by up to 10%, and other automakers are expected to follow suit. Dealerships fear this could lead to job losses as sales take a hit.
Wall Street isn’t happy either. On Thursday, auto stocks took a nosedive GM dropped over 7%, Ford fell nearly 4%, and car parts suppliers like Aptiv and BorgWarner each lost about 5%. The one outlier? Tesla. Its stock actually edged up slightly, as investors believe its U.S.-focused production will shield it from some of the fallout.
Canada Rethinks Its U.S. Reliance
Carney says Canada needs to rethink its economic dependence on the U.S., even though that won’t be easy. In 2023, vehicles were Canada’s second-biggest export (after oil), with a whopping 93% of those cars heading south to the U.S. But with Trump’s trade policies shaking things up, Canada is exploring ways to reduce its reliance on its longtime trade partner.
Trump Doubles Down
Despite mounting backlash, Trump isn’t backing down. In fact, he’s threatening even bigger tariffs if Canada and the EU try to retaliate. “If they work together to hurt the USA, they’ll face even larger tariffs,” he posted on Truth Social.
Meanwhile, the Trump administration has also reportedly paused contributions to the World Trade Organization, further isolating the U.S. from global trade institutions. Countries like China, Japan, and South Korea are already considering their own countermeasures.
While Trump argues that tariffs will help revive the U.S. industrial sector and offset tax cuts, critics warn they’ll likely lead to higher prices, weaker sales, and potential job losses bad news for an already fragile economy.
For now, all eyes are on next week when Trump’s tariffs officially go into effect and when Canada reveals exactly how it plans to strike back.
