Trump threatens Canada's auto sector and energy exports as trade tensions grow, sparking global reactions
US President Donald Trump’s 25 percent tariffs on steel and aluminum imports took effect as planned, applying to all countries, including Canada, according to BNN Bloomberg.
The Canadian government has initiated formal consultations with the US while preparing retaliatory measures amid growing tensions.
Mary Ng, Canada’s Minister of Export Promotion, International Trade, and Economic Development, confirmed that Canada is seeking formal consultations with the US on the tariffs.
She called the move “unjustified” and stated that it violates the Canada-United States-Mexico Agreement (CUSMA) and the World Trade Organization (WTO) Agreement.
Ng urged Washington to work with Canada as a trusted trade partner rather than imposing restrictive trade policies.
In response, the Canadian government has implemented dollar-for-dollar retaliatory tariffs on US goods, valued at $29.8bn.
Finance Minister Dominic LeBlanc, Foreign Affairs Minister Mélanie Joly, and Industry Minister François-Philippe Champagne emphasized that Canada will defend its industries and workers.
Joly confirmed that the trade dispute will be raised at the upcoming G7 summit, stating, “We will not back down, and we will not give in to this coercion.”
The Bank of Canada reacted by cutting its policy rate by 25 basis points to 2.75 percent, citing uncertainty from the trade war.
Governor Tiff Macklem warned that the tariffs could have severe economic consequences, stating, “We are facing a new crisis, and the central bank cannot offset the impacts of a trade war.”
Trump defended the tariffs, claiming they will strengthen US manufacturing and warning that further trade restrictions are coming on April 2.
He stated there would be “very little flexibility” in additional measures against countries imposing trade barriers on American exports.
In a Truth Social post, Trump threatened to “permanently shut down the automobile manufacturing business in Canada” unless Canada removes its own trade restrictions.
The auto industry, which relies on cross-border supply chains, could face significant disruptions.
Unifor Local 222 President Jeff Gray said that GM workers in Oshawa, Ontario, were “anxious, mad, angry, and scared,” as they feared the impact on jobs.
Trump also criticized Ontario for imposing a 25 percent surcharge on electricity exports to the US, which Premier Doug Ford later suspended.
The White House warned of “grave consequences” if Canada used electricity as a bargaining tool.
Trump acknowledged Ontario’s decision but maintained his stance on tariffs, stating, “It would have been a very bad thing if they kept it, but I respect that they pulled back.”
Energy Minister Jonathan Wilkinson stated that Canada could impose non-tariff retaliatory measures, such as restricting oil exports or levying export duties on products if the dispute escalates further.
He emphasized that all options, including measures targeting critical minerals, were under consideration.
Canada is the largest supplier of imported oil to the US, exporting about 4 million barrels per day.
However, Alberta Premier Danielle Smith rejected the idea of restricting exports, stating, “It’s not on the table. Zero.”
Alberta, which produces most of Canada’s oil, has opposed any moves that could disrupt its energy sector.
Meanwhile, industry leaders have warned of disruptions beyond energy. Moosehead Breweries CEO Andrew Oland described the situation as “chaos” due to aluminum supply chain complications.
Moosehead, which relies on US-manufactured aluminum can components, has responded by launching the “Presidential Pack”—a crate of 1,461 beers symbolizing the number of days in Trump’s presidency.
Former US Ambassador to Canada James Blanchard called on Congress to push back against Trump’s trade policies, stating, “The Canadian people deserve better.”
He recalled Canada’s long-standing support for the US, including its assistance following the 9/11 attacks.
Mexico’s President Claudia Sheinbaum announced that Mexico would not immediately retaliate against US tariffs but would reassess the situation on April 2, when additional trade restrictions are expected.
In the UK, Prime Minister Keir Starmer said his government was disappointed by the tariffs and warned that retaliation could be possible.
Starmer stated that Britain was keeping “all options on the table” as it continues trade negotiations with the US.
Former US Secretary of State Marco Rubio dismissed Trump’s previous threats about annexing Canada, stating that the issue would not be discussed at the G7 meeting in Quebec.
White House Press Secretary Karoline Leavitt defended the tariffs, calling them a “tax cut for the American people.”
When challenged by journalists, she insisted that tariffs benefit domestic workers, though the Bank of Canada has warned they could raise consumer prices and inflation in both countries.
Meanwhile, the US stock market has responded negatively.
The S&P 500 fell nearly 1 percent following Trump’s announcement, while the Dow Jones dropped over 500 points. Analysts have warned that prolonged tariffs could fuel further market volatility.
Ontario Premier Doug Ford met with US Commerce Secretary Howard Lutnick and announced that Ontario’s energy surcharge would be paused in “good faith.”
Ford said he remains hopeful that the US will reconsider its 50 percent tariff threat.
Ford also suggested that newly elected Liberal Leader Mark Carney, expected to become Canada’s next prime minister, could reset relations with the US once sworn in.
Carney has stated that Canadian counter-tariffs will remain in place “until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
Lutnick confirmed that Trump’s tariffs will remain until US domestic production is strengthened.
However, he indicated that formal trade negotiations with Canada would not take place until Carney officially assumes office.
Trump has continued to escalate rhetoric, posting on Truth Social that Canada “will pay a financial price so big it will be read about in history books.”
He questioned why past administrations allowed Canada to supply electricity to the US and suggested that further tariffs could be introduced.
Despite ongoing diplomatic efforts, trade tensions between Canada and the US remain high.
The Canadian government has reaffirmed its commitment to defending domestic industries, while businesses brace for further economic uncertainty.
