President Donald Trump speaks to reporters in the Oval Office at the White House in Washington, March 26.The Associated Press
In a late-night social media post, President Donald Trump threatened Canada and the European Union if they worked together to “do economic harm” to the United States, hours after the Trump administration announced 25-per-cent tariffs on foreign auto imports.
“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!” he wrote on Truth Social in the early hours on Thursday.
On Wednesday, Mr. Trump signed an executive order that imposes 25-per-cent tariffs on vehicles and some auto parts imported into the U.S., starting April 3, a move that industry experts have warned will drive up costs for both businesses and consumers as well as disrupting the auto industry’s complex cross-border supply chains.
U.S. President Donald Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war he kicked off upon regaining the White House this year in a move auto industry experts expect will drive up prices and stymie production.
Reuters
Prime Minister Mark Carney said during a press conference on Thursday afternoon that Canada will respond “forcefully” to the latest tariffs, but warned that Canada must start fundamentally reshaping its economy to reduce dependence on the United States.
Opinion: Trump is right to fear a Canada-Europe team-up. But Canada must rise to the challenge first
Mr. Carney said he expects to talk to Mr. Trump in the coming days, revealing that the White House had reached out Wednesday to arrange a call.
When asked about Mr. Trump’s social media post threatening Canada and the EU, Mr. Carney said “I take note of Mr. Trump’s comment. But I don’t take direction.”
Under Mr. Trump’s executive order, vehicles imported under the United States-Mexico-Canada free-trade agreement will be taxed at 25 per cent based on their non-U.S. content. Auto parts covered by the trade agreement will face tariffs at a later date, also based on their non-U.S. content.
On Friday, mayors from Canada, Mexico and the United States will be in Washington for the 2025 Mayors’ Trade Summit, where they will address how tariffs are affecting the community and urge the Trump administration to repeal the levies. Toronto Mayor Olivia Chow, Windsor Mayor Drew Dilkens and Ottawa Mayor Mark Sutcliffe are among the Canadian delegation.
The auto tariffs have already rattled markets in Europe, Japan, South Korea and the U.S., as Mr. Trump’s trade war deepens.
U.S. auto makers, whose supply chains criss-cross throughout North America, took a hit Thursday morning, with General Motors falling 8.2 per cent and Ford dropping 2.7 per cent. Meanwhile Tesla was up about 0.8 per cent, after a 5.6 per cent drop in the previous session.
Asian automaker stocks fell after Mr. Trump announced the new tariffs: shares in Hyundai fell by 4.5 per cent in trading Thursday. Kia was also down about 3.6 per cent, while Toyota was down about 2 per cent.
European auto makers Volkswagen, BMW, Mercedes-Benz, Porsche and Continental lost 5.5 billion euros in combined market value on Thursday, highlighting investor concern that tariffs will bring increased costs.
In an attempt to fend off the tariffs, earlier this week South Korean manufacturer Hyundai announced a US$21-billion investment in the United States, which included a new production base in Georgia and a steel factory in Louisiana. U.S. President Donald Trump later touted the investment as a “clear demonstration that tariffs very strongly work.”
Other auto makers, including Volvo Cars, Volkswagen’s Audi and Mercedes-Benz have already said they will move some production to the U.S. next year.
During the Wednesday announcement, Mr. Trump reiterated his promise to introduce “reciprocal tariffs” on April 2, which would be an effort to match tariffs and nontariff barriers that other countries place on U.S. goods.
In another Truth Social post, published very early Thursday, he wrote: “LIBERATION DAY IN AMERICA IS COMING, SOON. FOR YEARS WE HAVE BEEN RIPPED OFF BY VIRTUALLY EVERY COUNTRY IN THE WORLD, BOTH FRIEND AND FOE. BUT THOSE DAYS ARE OVER — AMERICA FIRST!!!”
Canada had a US$63-billion goods trade surplus with the U.S. last year, although that was largely due to oil exports, and decreases when factoring in services.
With reports from Steven Chase, James Griffiths and Reuters