Canada must “fundamentally reimagine our economy” in the face of escalating tariffs imposed by U.S. President Donald Trump, Prime Minister Mark Carney said Thursday, declaring the “old relationship” between Canada and the U.S. is “over.”
Carney promised to bring retaliatory measures, reduce internal trade barriers and pivot Canada’s economy away from reliance on the U.S., after Trump announced new auto tariffs that will begin next week.
“Over the coming weeks, months and years, we must fundamentally reimagine our economy,” Carney told reporters in Ottawa after meeting with the cabinet committee on Canada-U.S. relations.
“The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over.”
Carney wouldn’t say exactly what retaliatory measures the federal government will take in response to Trump’s latest round of tariffs. He said more will be announced on April 2, when the new auto tariffs and further “reciprocal” tariffs on all foreign trading partners are set to begin.
Carney confirmed he has not yet spoken to Trump since becoming prime minister earlier this month, but plans to do so in “the next day or two” after he said Trump reached out Wednesday evening to schedule a call.
“I appreciate the opportunity to discuss how we can protect our workers and build our economies,” Carney said. “I will make clear to the president that those interests are best served by cooperation and mutual respect, including of our sovereignty.”
Carney pressed pause on his federal election campaign as the Liberal Party leader Thursday to chair the cabinet committee meeting weighing Canada’s response to the fresh round of tariffs coming from Trump administration.
As per the caretaker convention, Carney can act in his prime ministerial capacity during an election campaign as long as his actions are routine, non-controversial, agreed to by opposition parties or “urgent and in the public interest.”
Carney reiterated his promise from last week after meeting with Canada’s premiers that his government will ensure all federal limits on internal trade will be removed by July 1, and take steps to boost domestic investment.
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“I reject any attempts to weaken Canada, to wear us down, to break us so that America can own us. That will never happen,” Carney said.
“Our response to these latest tariffs is to fight, to protect, and to build.”
Trump signed an executive order on Wednesday for 25 per cent tariffs on all foreign-made cars and light trucks, in addition to tariffs already in place on those goods.
The auto tariffs that are set to go into effect April 2 will not apply on U.S.-made parts in foreign-made vehicles, according to the order.
The new auto tariffs are in addition to 25 per cent tariffs on all Canadian goods, as well as an additional 25 per cent on steel and aluminum imports and a 10 per cent levy on Canadian energy imports.
Global “reciprocal” tariffs on all foreign imports, including from Canada, are also planned for April 2, which is when the auto tariffs are expected to come into force.
Canada has already responded to Trump’s trade actions with counter-tariffs on almost $60 billion worth of American goods, which were announced in retaliation for the 25 per cent tariffs on all Canadian goods and a subsequent round that was retaliation for the steel and aluminum tariffs.
Another round targeting $125 billion worth of U.S. goods is set to begin on April 2, and the government has not indicated those are off the table since Carney took over as prime minister.
Carney on Thursday rejected Trump’s threat from earlier in the day of “large scale” tariffs on Canada if it takes retaliatory actions that “do economic harm to the USA.”
“I take note of the president’s comment. I don’t take direction from him,” he said.
Trump’s tariffs and repeated threats to Canada’s sovereignty are emerging as a key campaign focus for the main federal parties in the 2025 election campaign.
Speaking at a campaign stop in Windsor, Ont., NDP Leader Jagmeet Singh said Trump’s tariffs feel like a “betrayal” and “a gut punch,” adding that Canada needs to fight back.
“Donald Trump has started an illegal trade war with Canada, one of their best allies, for absolutely no reason and now workers are reeling,” Singh told reporters Thursday.
Singh said he will not be critical about the approach when it comes to Canada’s response to Trump’s trade actions, saying “we should all be united.”
“I’m on Team Canada when it comes to fighting back against Donald Trump in the negotiations. I want Canada to win.”
To support workers, Singh pledged Employment Insurance benefits to cover wages.
The NDP is also proposing to waive the GST off Canadian vehicles to incentivize people to buy local, Singh said.
Conservative Leader Pierre Poilievre urged Trump to “knock it off” and “stop attacking America’s friends.”
Poilievre has proposed “dollar-for-dollar tariffs carefully aimed at maximizing impact on American companies while minimizing impact on Canadian consumers.”
He wants to “put all the tariff revenues into help for affected workers and businesses” and says the “government should not keep a dime of the new revenue.”
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