Ottawa Announces Retaliatory Tariffs, As Trade War Claims its First Jobs
Prime Minister Mark Carney announced today that Canada will respond to U.S. automotive tariffs with an equivalent 25 per cent levy on American-made vehicles.
The move comes less than a day after United States President Donald Trump announced a 25 per cent tariff on all foreign-made vehicles. The U.S. also announced a 10 per cent blanket tariff on all goods going into that country, which Ottawa has decided not to reciprocate, in order not to disadvantage parts manufacturers, per The Toronto Star.
In addition to auto tariffs, Canada will fight America’s trade actions in court and under the Canada, U.S., Mexico trade agreement (CUSMA). Carney described Canada’s response as “carefully calibrated” and has received the support of Ontario Premier Doug Ford, where the majority of Canada’s automotive market operates from.
Whether or not the automotive industry supports Ottawa’s response remains to be seen. Yesterday, David Adams, the president of Global Automakers of Canada, a lobby group that represents a number of car companies from Europe and Asia, pled “governments at all levels to consult with industry and think carefully about how to respond effectively to these unjustified tariffs.”
Today, Unifor, which represents Canadian auto workers employed by American automakers, blamed American tariffs for Stellantis’ decision to temporarily lay off more than 4,500 workers at its Windsor Assembly Plant. The union was informed on April 2 that the Franco-American automaker will shut down the plant for two weeks, starting on April 7.
“Unifor warned that U.S. tariffs would hurt auto workers almost immediately and in this case the layoffs were announced before the auto tariff even came into effect,” said Unifor National President Lana Payne. “Trump is about to learn how interconnected the North American production system is the hard way, with auto workers paying the price for that lesson.”
The pain is being felt by auto workers throughout North America. Stellantis also temporarily shut down plants in Mexico, and laid off 900 workers at its powertrain and stamping plants in Michigan and Indiana.
The impact of these decisions is being felt in more than just the automotive sector. Following Trump’s announcement, market values at stock exchanges around the world have fallen, with the Toronto Stock Exchange down more than three per cent on the afternoon of April 3.
