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Carney says US trade war 'will come at a cost' as Canada strikes back on tariffs
Confirmed
In Short: Prime Minister Mark Carney has warned that Canada's pivot away from the US as its largest trading partner 'will come at a cost,' as retaliatory tariffs on American goods come into force.
Carney's video address highlighted the economic challenges Canada faces as it diversifies its trade relationships, with the aerospace industry, a significant contributor to the economy, particularly affected by the tariffs.
The US trade representative, Jamieson Greer, indicated that Washington would consider imposing tit-for-tat tariffs on Canada as early as Tuesday.
Canadian businesses are scrambling to adapt to the new trade landscape, with some, like Japanese brewer Sapporo, shifting production to the US to avoid tariffs.
Carney emphasized that the counter-tariffs against the US are necessary to protect Canadian workers, while also promising support for those affected by the ongoing trade war.
What's confirmed
- Prime Minister Mark Carney is warning Canadians that the country's pivot away from the United States will come at a cost — but insists the alternative would be far worse.
- In a video released on Tuesday — hours after Canada's retaliatory tariffs kicked in — Carney reiterated Canada's plan to respond to the U.S. trade war by striking new trade deals with other countries to become less reliant on the U.S. "We have everything we need to pivot and prosper," Carney said.
- The video is the latest in a series Carney launched last spring to update Canadians on government policies and the government's response to U.S. trade actions.
- In his video address, Carney said Trump's tariffs were designed to harm some Canadians more than others.
- "In the spring of last year, I warned that America is trying to break us so they can own us. And I promised that that will never, ever happen," Carney said in his video address.
- In January 2025, before being sworn in for his second term, Trump ruled out using military force to annex Canada, but said he would consider using "economic force" to get Canada to become part of the U.S. Canada's reciprocal tariffs took effect on Tuesday in response to Trump's latest round of 50 per cent tariffs last month, which targeted dozens of products, including honey, hockey sticks, milk and cheese.
- "I don't believe in escalating the conflict, that's not constructive," Carney said in his video address.
- Carney said the goal of those policies is to come out stronger and more resilient so "no country can ever hold us hostage, and that we can live how we want to live." In his video address, Carney again accused the U.S.
What's still developing
- Prime Minister Mark Carney has said that Canada's pivot away from the US as its largest trading partner "will come at a cost", as a wave of Canadian retaliatory tariffs on American goods come into force.
- The aerospace giant is one of the largest in the country, contributing over C$7bn to Canada's annual GDP in 2024, according to a report by accounting firm PwC that was commissioned by Bombardier.
- Another post showed a map of North America - including Canada and Mexico - and Greenland all overlaid with the US flag.
- The US economy is about 13 times larger than Canada's, and the majority of Canadian exports are sold to the US.
- Businesses on both side of the border are scrambling to deal with what comes next.
- Opinion polls suggest the majority of Canadians support, external their country imposing retaliatory tariffs on the US.
- The Canadian Chamber of Commerce has urged the Carney government to take a surgical approach to retaliation.
- One sector that saw a modest bump was manufacturing - a gain the Canadian government attributes to consumers and businesses buying more made-in-Canada products.