Markets tumble and factories halt as Canada hits back in widening tariff standoff with Trump
Prime Minister Mark Carney announced that Canada will implement 25 percent tariffs on vehicles imported from the United States that do not comply with CUSMA.
Vehicle parts are exempt, according to BNN Bloomberg.
“The Government of Canada will be responding by matching the US approach with 25 per cent tariffs on all vehicles imported from the United States that are not compliant with CUSMA, our North American free trade agreement,” said Carney.
He cited Canada’s integrated production system as the reason for excluding auto parts.
Carney said he had previously advised US President Donald Trump of the pending retaliation but confirmed that no follow-up call was scheduled.
He added that Canada would begin renegotiating its trade relationship with the US after the election.
“If the United States no longer wants to lead, Canada will,” Carney said, stating that Canada would work with reliable trade partners. He also acknowledged the hardships ahead and said it will require them to make difficult choices and sacrifices.
Market plunge follows tariff announcements
Canadian and US markets dropped sharply. The S&P/TSX Composite Index closed 3.84 percent lower at 24,335.77, while the S&P 500 and Dow Jones fell 4.57 percent and 3.98 percent respectively.
Earlier in the day, the Dow Jones fell 1,500 points within the first hour of trading.
Major Canadian companies such as Shopify and Aritzia were significantly impacted, with both seeing shares drop by 20 percent. Lululemon fell 10 percent.
Brendan Caldwell from Caldwell Investment Management said, “It’s going to cost Aritzia and the other clothing manufacturers quite a bit of money.”
Auto industry responds with caution and closures
Industry Minister Anita Anand said she had spoken with auto manufacturers, who “intend to stay” in Canada.
She referenced agreements under the Strategic Investment Fund and announced a “remission framework” to provide relief for manufacturers, with final details still pending.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, stated that the industry works on six and seven per cent profit margins and that, on math, a 25 per cent tariff still does not work.
Stellantis announced temporary layoffs of 900 US workers and paused operations at plants in Mexico and Windsor, Ontario. GM Canada reported no operational changes but is “monitoring and assessing” the situation.
Support from premiers across provinces
Alberta Premier Danielle Smith said all premiers supported Ottawa’s response during a meeting with Carney.
“The prime minister did let us know... that clearly Canada has to have a proportionate response,” she said.
Ontario Premier Doug Ford also supported the retaliatory tariff and said, “I am a strong supporter of showing the US that we negotiate through strength.” Ford said remaining US tariffs are “totally unacceptable” and called for zero tariffs.
Federal leaders propose economic countermeasures
Conservative Leader Pierre Poilievre proposed cutting the GST on Canadian-made vehicles, estimating a savings of $2,500. He also called on premiers to remove provincial sales taxes and pledged to demand a rapid CUSMA renegotiation if elected.
NDP Leader Jagmeet Singh announced “Canada Victory Bonds,” described as tax-free savings vehicles with a 3.5 percent interest rate.
He also pledged a ‘Build Canadian, Buy Canadian’ procurement plan and an expansion of EI benefits to 50 weeks at a rate of 66 percent.
Bloc Québécois demands Quebec role in negotiations
Bloc Québécois Leader Yves-François Blanchet said Quebec should appoint its own members to any US trade negotiations and hold veto power. He supported the retaliatory tariffs but warned that supply management must be protected.
Campaign trail developments on Day 12
Carney returned to campaigning in Montreal after announcing the tariffs. Poilievre campaigned in Kingston and Oshawa. Singh held events in Ottawa.
A Nanos Research poll placed the Liberals at 46 percent, ahead of the Conservatives at 37 percent. The NDP polled at 9 percent, followed by the Bloc (6 percent), Greens (2 percent), and People’s Party (1 percent).
Vetting controversies hit Conservative campaign
Poilievre defended his party’s vetting process after dropping four candidates in two days. He also addressed criticism of Kingston candidate Bryan Paterson’s past ties to a church involved in conversion therapy.
Paterson said, “I do not support conversion therapy,” and cited his support for a municipal ban.
Poilievre said Paterson renounced conversion therapy “years ago” and criticized Carney for not dismissing a Liberal candidate who made controversial remarks, calling it a “teachable moment.”
Trump defends tariffs as economic ‘surgery’
Trump described his tariffs as beneficial, saying they would result in “six or seven trillion dollars” in US revenue.
On Truth Social, he wrote, “THE PATIENT LIVED... STRONGER... BETTER... MORE RESILIENT.”
US Senators Chuck Grassley and Maria Cantwell introduced a bill requiring presidents to seek congressional approval for tariffs within 60 days or risk expiry. Whether it will pass remains uncertain.
