PM Mark Carney Declares Canada's Trade Relationship with U.S. 'Over'
Prime Minister Mark Carney declared on Thursday that Canada’s longstanding economic and security partnership with the United States had reached an inflection point, vowing a sweeping reassessment of bilateral ties in response to new U.S. tariffs.
Speaking in Ottawa after meeting with provincial leaders, Carney accused the Trump administration of forcing Canada to pivot toward more reliable trading partners. "The old relationship we had with the United States, based on deepening integration of our economies and tight security and military cooperation, is over," he told reporters. "The time will come for a broad renegotiation of our security and trade relationship."
His remarks cast doubt on the future of the U.S.-Mexico-Canada Agreement (USMCA), a landmark trade deal negotiated under President Donald Trump's first term. Carney signaled Canada would retaliate against U.S. tariffs with targeted measures designed to "have maximum impact in the United States and minimum impacts here in Canada."
Economic Fallout Looms as Auto Tariffs Threaten Jobs
The immediate trigger for the diplomatic rupture was Trump’s announcement of a 25% tariff on Canadian auto imports, set to take effect April 3. Analysts warn the move could devastate Canada’s auto sector, which supports roughly 500,000 jobs. The U.S. imported nearly $475 billion in vehicles last year, with Canada among its top suppliers.
The tariffs have already rattled markets: Shares in General Motors plunged 7.4% on Thursday, while Ford dropped 3.9%. Bank of Canada Governor Tiff Macklem warned the measures risk tipping Canada into a recession, citing "severe" potential economic damage. "The uncertainty alone is already causing harm," he said earlier this month after cutting interest rates.
Carney, who took office on March 14, has yet to speak with Trump—a departure from tradition for new Canadian leaders. Though the White House has now requested a call, Carney insisted substantive negotiations would require "respect" from Washington, including an end to threats against Canadian sovereignty.
Global Backlash as Allies Condemn U.S. Trade Policy
European leaders joined Canada in condemning the tariffs. French President Emmanuel Macron called them "not good for the U.S. or European economies," while German Chancellor Olaf Scholz warned of a "path at whose end lie only losers." European Commission President Ursula von der Leyen dismissed tariffs as "taxes" that harm consumers.
British Prime Minister Keir Starmer struck a cautious tone, calling the measures "very concerning" but pledging a "pragmatic" response. Poland’s Donald Tusk, meanwhile, vowed Europe would defend its interests "not on our knees," underscoring the widening rift in transatlantic relations.