President Trump’s announcement of 25 percent tariffs on cars and parts sent shock waves through the global auto industry. Canada said it would respond with tariffs of its own.
Prime Minister Mark Carney of Canada on Thursday vowed to defend his country’s workers, businesses and economy in response to new tariffs and threats from President Trump. He said Canada would move rapidly to trade more with other countries because it was clear that the United States was “no longer a reliable partner.”
Mr. Carney’s comments came as President Trump’s plan to impose a 25 percent tariff on cars and parts imported into the United States sent a shudder through the global car industry, and as the consequences for complex supply chains and talk of retaliatory measures increased the likelihood of a worldwide trade war.
Markets in Asia, Europe and the United States wobbled as many automakers’ stock prices fell, and auto executives faced the prospect of unwinding sprawling cross-border networks forged through decades of free trade. Mr. Carney, alternately soft-spoken and defiant in a news conference, said Canada would announce its own retaliatory tariffs against the United States next week, and was digging in for a fight.
“Nothing is off the table as we defend our workers and our country,” he said.
The tariffs, which affect both American and foreign carmakers, are set to go into effect on April 3 and will apply to cars and trucks as well as important parts like engines, transmissions and electrical components that are shipped into the United States. That includes vehicles from American brands whose automobiles are assembled outside of the country, including in Canada or Mexico.
President Trump announced the 25 percent tariffs on Wednesday, and then raised the stakes in a middle-of-the-night social media post early Thursday in which he said he would target the European Union and Canada if they banded together to “do economic harm” to America.
“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Mr. Trump wrote.
The threats, and the uncertainty about whether Mr. Trump would follow through after earlier announcing and then suspending other tariffs, were of no comfort to foreign governments or the multibillion-dollar auto industry.
Nearly half of all vehicles sold in the United States are imported, as well as nearly 60 percent of the parts in vehicles assembled in the United States. That means the tariffs could have serious implications for countries like Mexico, Canada, South Korea, Japan and Germany, which were already reeling from the Trump administration’s tariffs on steel, aluminum, autos and potentially a broader array of goods and services.
Here’s what else to know about the fallout from Mr. Trump’s tariffs:
- Auto stocks fall: Shares in most automakers wobbled on Thursday, with General Motors falling more than 7 percent and Ford and Stellantis also down between 2 and 3 percent. Among the hardest hit in global markets were carmakers based in Germany, Japan and South Korea, which sell millions of cars in the United States. Read more ›
- Cost to consumers: Tariffs on imported cars, trucks and auto parts will raise prices by thousands of dollars for consumers. What is not clear is how soon those increases will kick in, how high they will go and which models will be affected the most. Read more ›
- Carmaker concerns: The tariffs will have far-reaching effects on automakers in the United States and abroad. But the sting will not be the same for every company. Read more ›
- Global reaction: South Korea and Japan announced major investments in the United States. Mexico deployed troops to the southern border. Europe offered talks to avert a trade war. None of it was enough to prevent one of those countries’ biggest tariff concerns from becoming a reality.
