Otawa
US President Donald Trump’s new tariff policy has caused a stir in Canada. Trump has announced a 25% tariff on auto imports, which the White House is watching as promoting domestic production. But Canada has passed this decision. Describing it as an ‘direct attack’, Prime Minister Mark Carney said that it will not only harm Canada but also to America itself.
Carney’s tough stance: ‘We will protect our country’
Canadian Prime Minister Mark Karney expressed displeasure over Trump’s decision and said, “We will protect our employees, companies and the country.” He further said that he would consider taking retaliation after seeing the complete details of the executive order of Trump.
Canadian auto sector threatened
Carney has announced to create a ‘strategic reaction fund’ of $ 2 billion (US $ 1.4 billion) to save the Canadian auto sector affected by Trump’s decision. This fund will help the Canadian auto employees whose jobs may affect this tariff. Significantly, the automobile is the second largest exporter in Canada. Here more than 1.25 lakh people work directly in this area, while 5 lakh people are working in other industries related to it. Carney clearly said, ‘We will always stand for our auto employees.’
Trump’s claim – ‘This will benefit the American economy’
Trump justified his decision and said that this tariff will strengthen America’s automotive sector and increase domestic production. He said, ‘We will effectively impose 25% tariffs, it will be permanent.’ However, experts believe that this decision will affect the global supply chain and increase economic pressure on vehicle manufacturers.
American consumers and companies will suffer big losses
Carney described this decision of Trump not only for Canada, but also for American consumers and companies. He said, “Their trade war is harming American workers and it will cause even more damage.” This is also confirmed by a report, stating that in March, the US Consumer Confidence Index has fallen 7.2 points to 92.9, which is the lowest level since January 2021.
Trump has put tariffs before
This is not the first time Trump has put a tariff on Canada. Earlier too, he imposed 25% tariff on Canada’s steel and aluminum. Now from April 2, all business partners including Canada have also been threatened with tariffs.
Canada’s befitting reply – ‘We will not bow down!’
Questioning Trump’s intention, Carney said, ‘He wants to weaken us so that America can dominate us. But this will never happen, because we do not just think about ourselves, we think about each other. It will now be seen whether Canada takes any major action against this decision or tries to find a solution from the conversation. But one thing is certain – Trump’s decision will affect the automobile industry worldwide.
How much will be affected on which country?
The economies of Canada and America have been largely dependent on each other. Both countries trade under North American Free Trade Agreement ie NAFTA. According to 2023 data, Canada is a way America’s second largest trading partner country. The US imports about $ 421 billion from Canada, including crude oil, natural gas and automobile parts.
In a way, Canada supplies more than 60 percent crude oil and more than 85 percent natural gas to the US. Due to its closure, energy prices in America can touch the sky.
At the same time, Canada’s economy is also very dependent on America. Canada sends about 75 percent of its total exports to the US. If this market is closed, then there may be a huge decline in Canadian GDP.
It will not be easy for Canada to find new business partners. Immediate options are limited due to distance and cost with Europe and Asia. This may increase unemployment and economic crisis.
Let us know that Canada and America are not only neighbors, but are also associated with military alliances like NATO and Norad (North American Aerospace Defense Command).
Which decision of Trump provoked Canada?
Trump has imposed a 25 percent tariff on cars imported into America. This new tariff of Trump is going to be implemented from April 2. It is believed that America will benefit from about $ 100 billion from this tariff.
This 25 percent tariff of Trump will be imposed on imported car and auto parts. Trump hopes that this will increase the revenue of American auto companies, but on the other hand it also threatens to increase inflation because the burden of tariff may finally fall on the customers.
Apart from this, Trump has also announced to install reciperock tariffs on India and many countries from April 2. Addressing the US Parliament this month, Trump said that many countries like India take too much tariffs, now America will do the same. It is believed that a new trade war can start from April 2.