Canada’s old relationship with the US. has been said to be severed, according to the Canadian Prime Minister Mark Carney’s comment on Thursday.
He said the relationship “based on deepening integration of our economies and tight security and military cooperation, is over”.
Speaking to reporters in Ottawa after a cabinet meeting, Carney said Canadians must fundamentally reimagine their economy.
This he said must be done in the face of US President Donald Trump’s tariffs.
He said Canada would respond with retaliatory tariffs that will have “maximum impact” on the US.
Trump announced on Wednesday he would target imported vehicles and vehicle parts with a 25% tax, stating: “This is permanent.”
Carney, the Liberal Party leader, called the original Canada-US Automotive Products Agreement signed in 1965 the most important deal in his lifetime.
“That’s finished with these tariffs,” he said in French.
He continued that Canada can sustain an auto industry with the US tariffs.
This he said was possible, provided the government and business community work to “reimagine” and “retool” the industry.
According to him, Canada needs to build an economy Canadians can control.
This control, Carney says, would include rethinking it’s trade relationship with other partners.
It remains to be seen whether Canadians can have a strong trading relationship with the United States going forward, he added.
Carney has switched his campaign plans ahead of next month’s general election to confront the latest import duties.
The US has already partially imposed a blanket 25% tariff on Canadian goods, along with a 25% duty on all aluminium and steel imports.
Canada has so far retaliated with about C$60bn ($42bn; £32bn) of tariffs on US goods.
The new car tariffs will come into effect on 2 April, with charges on businesses importing vehicles starting the next day, the White House said.
Taxes on parts are set to start in May or later.
Early on Thursday morning, Trump warned Canada and the EU against joining forces versus the US in the trade war.
Trump posted on his Truth Social platform:
“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.”
Carney met his ministers in Ottawa on Thursday morning to “discuss trade options”.
He had originally been scheduled to campaign in Quebec.
He said during his press conference that President Trump had reached out to him last night to schedule a call.
He stated that the call would take place in the “next day or two”.
If it takes place, this would be the first call between the two heads of state.