Trump announces 25% tariffs on car imports to US and Carney promises C$2 bln fund to boost Canadian auto industry

March 26, 20258:16 AM PDT

OTTAWA, March 26 (Reuters) - Canadian Prime Minister Mark Carney on Wednesday said if the ruling Liberals won an April 28 election, his government would create a C$2 billion ($1.40 billion) fund to boost the auto sector's competitiveness. He also stated US President Donald Trump’s latest 25% tariff on non-US-manufactured automobiles is a “direct attack” in violation of the US-Mexico-Canada Agreement and that Canada will examine its options for a response — including possible retaliatory tariffs.

Carney, speaking to a televised press conference in Windsor, Ontario, also said his government would work with industry to build more car parts in Canada and limit the number of parts that cross the border with the United States during production.

The North American auto industry is highly integrated but now finds itself threatened by tariffs that U.S. President Donald Trump is promising to impose.

Carney, noting the auto sector supported 125,000 jobs directly and almost another 500,000 jobs in related industries, said the new fund would protect workers affected by tariffs.

"It will fortify the entire Canadian auto supply chain, from raw materials to finished vehicles ...we will build an all-in Canada network for auto manufacturing components," he said.

When it came to buying official vehicles for official business, a Liberal government would focus on buying autos that were made in Canada, he added.

Carney attacks Trump's auto industry tariffs

Canadian Prime Minister Mark Carney said US President Donald Trump’s latest 25% tariff on non-US-manufactured automobiles is a “direct attack” in violation of the US-Mexico-Canada Agreement and that Canada will examine its options for a response — including possible retaliatory tariffs.

“We will defend our workers,” Carney said at a news conference in Kitchener, Ontario, Wednesday. “We will defend our companies, we’ll defend our country, and we’ll defend it together.”

Carney noted that Canada had slapped retaliatory tariffs on US goods before in response to Trump’s repeated taxes on Canadian exports, but said Canada has “other options” available, as well.

He said he “will convene a meeting of the Canada-US cabinet tomorrow to discuss our trade options.”

“We have put in place the mechanisms, so that if it is appropriate, for retaliatory tariffs. And there’s many considerations to be taken in those regards,” Carney said.

Carney later said it “would be appropriate that the president and I speak given the action that he’s taken. I’m sure that will happen soon.”

The prime minister has previously said he would meet with Trump only if the president — who has repeatedly threatened to annex Canada — would accept Canada’s sovereignty as a precondition for any discussion.