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Prime Minister Mark Carney said on Thursday that Canada’s old relationship with the US is “end” and vowed that there will be “broad renegotiations” of the country’s trade deal.
Speaking in Ottawa after meeting the country’s premier, Carney said the tariffs imposed by US President Donald Trump would force Canada to rethink, restructure its economy and seek a “trusted” trading partner.
“We’ve deepened our economic integration and ended our old relationship with the United States based on strict security and military cooperation,” he told reporters.
“It will be time for a broad renegotiation of security and trade relations.”
Carney’s comments seem to raise doubt about the future of the USMCA negotiated between the two countries and Mexico during the previous Trump administration, and are hailed as one of the most important trade deals in the world.
Carney said Canada will fight US tariffs with its own retaliatory trade action “having the biggest impact on the US and the least impact in Canada.”
On Wednesday, Trump said he would impose a 25% tariff on imports of foreign-made cars in a move that he said the US was intended to boost the US auto industry.
Although USMCA compliant components are temporarily exempt from tariffs, collection can have a major impact on the Canadian economy.
Trump’s tariffs aim to boost US industry, but general Motors shares fell 7.4% on Thursday. Ford’s shares, which produce fewer vehicles than its rivals in Mexico and Canada, fell 3.9%.
Earlier this month, Trump offered Canadian and Mexican automakers a grace period when they temporarily exempt USMCA from all products that comply with the new tariffs.
“We fight back against everything we need to get the best deal in Canada. We build an independent future for our nation, which is stronger than ever,” Carney said.
The Prime Minister said its supply chains in key sectors such as the Canadian economy and the automotive industry must fundamentally change to isolate it from further tariffs and US hostility.
“We’re going to have to do some things in a very different way,” he said.
Governor of the Bank of Canada Tiff McClem said US tariffs had caused Canada to recession and a “new crisis” was looming due to the trade war with the United States.
“Depending on the scope and duration of US tariffs, the economic impact can be severe. Only uncertainty is already causing harm,” he said earlier this month, saying he announced another cut in interest rates.
Carney said that while Canada’s automobile sector can withstand Trump’s tariffs, it requires “access to other markets” and that the country “needs to rethink and rebuild the automobile sector. [and] Retool.”
He recently traveled to London and Paris, his first trip as prime minister, to strengthen trade with other partners in the wake of US hostilities.
Carney, who is in the midst of a national campaign ahead of the April 28 vote, said he will talk to Trump “the next day or two.”
Some Canadian Cabinet members could head to Washington to meet their counterparts, he said.
He added that the US president’s tariffs “will hurt American workers and American consumers.”
