Canada will match U.S. President Donald Trump's 25% auto tariffs with a tax on vehicles imported from the United States, Prime Minister Mark Carney said Thursday.
That is a part of a limited set of counter measures against U.S. tariffs, with Carney calling Trump's protectionist moves a tragedy for global trade.
Trump's previously announced 25% tariffs on auto imports took effect Thursday. Carney said he told Trump last week in a phone call that he would be retaliating for those tariffs.
Canada will now tax all vehicles imported from the United States that are not compliant with the U.S.-Mexico-Canada trade deal, Carney told a news conference.
"We take these measures reluctantly. And we take them in ways that is intended and will cause maximum impact in the United States and minimum impact in Canada," he said.
Carney said Canada won't put tariffs on auto parts as Trump has done, because he said Canadians know the benefits of the integrated auto sector.
The parts can go back and forth across the Canada-U.S. border several times before being fully assembled in Ontario or Michigan.
Carney said Canadians are already seeing the impact.
Automaker Stellantis said it shut down its assembly plant in Windsor, Canada, for two weeks from April 7, the local union said late Wednesday.
The president of Unifor Local 444, James Stewart, said more scheduling changes were expected in the coming weeks.
Carney said that will impact 3,600 auto workers that he met with last week.
Autos are Canada's second-largest export and the sector employs 125,000 Canadians directly and almost another 500,000 in related industries.
Last week, Carney announced a CAD$2 billion ($1.4 billion) "strategic response fund" that will protect Canadian auto jobs affected by Trump's tariffs.
Trump previously placed 25% tariffs on Canada's steel and aluminum. And Carney said Canada can expect further tariffs on pharmaceuticals, lumber and semi-conductors.
"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."
Trump's self-described "reciprocal" tariffs sent shockwaves through markets on Thursday. His 10% baseline levy on all U.S. imports, with much higher duties on some countries, encouraged investors to flee risky assets as they worried Trump was upending global trade.
"The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy," Carney said.
A former two-time central banker in Canada and the U.K., Carney said Trump's actions will reverberate in Canada and across the world.
"They are all unjustified and unwarranted and in our judgement misguided," Carney said.
Canada’s initial CA$30 billion ($21 billion) worth of retaliatory tariffs remain in place, having been applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Carney suspended his election campaign to return to Ottawa to deal with Trump's tariffs.
Opposition Conservative leader Pierre Poilievre said he would remove the federal tax on Canadian-made vehicles.
Ontario Premier Doug Ford, whose province has the bulk of Canada's auto industry, called Canada's latest tariffs a "measured response."
