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Prime Minister Mark Carney said on Thursday that former Canada’s relations with the United States were “finished” and promised that there would be a “large renegotiation” of the trade agreement between countries.
Speaking in Ottawa after meeting the country’s provincial prime ministers, Carney said the prices imposed by US President Donald Trump would force Canada to revive and reshape his economy and seek “reliable” business partners.
“The old relationship we have had with the United States, depending on the deepening of the integration of our economies and our tight security and soldiers, is over,” he told journalists.
“The moment will come for a large renegotiation of our security and our commercial relationship.”
Carney’s comments seem to question the future of the USMCA, which was negotiated between the two countries and Mexico during the previous Trump administration and was praised as one of the most important trade agreements in the world.
Carney said Canada would fight against American prices with commercial reprisal actions of its own “which will have a maximum impact in the United States and minimum impacts in Canada”.
Trump said on Wednesday that the United States would impose a 25% rate on imports of foreign manufacturing cars in a decision that said it was aimed at stimulating the American automotive industry.
Although components in accordance with USMCA are temporarily exempt from prices, the tax could have a significant impact on the Canadian economy.
Trump’s prices are intended to stimulate American industry, but General Motors’ actions dropped 7.4% on Thursday. The actions of Ford, which manufactures fewer vehicles in Mexico and Canada than its rival, fell by 3.9%.
Earlier this month, Trump offered a stay to Canadian and Mexican car manufacturers when he temporarily exempt all goods comply with USMCA from new rates.
“We are going to retaliate with everything we have to get the best offer for Canada. We are building an independent future for our country, stronger than ever,” said Carney.
The Prime Minister said that the Canadian economy and its supply chains in critical sectors such as the automotive industry should be fundamentally changing to isolate themselves from additional prices and American hostility.
“We will have to do some things very differently,” he said.
Tiff Macklem, Governor of the Bank of Canada, said that American prices are likely to put Canada in a recession and that a “new crisis” will be looming due to the trade war with the United States.
“Depending on the extent and duration of American prices, the economic impact could be serious; uncertainty alone already causes damage,” he said earlier this month when he announced another drop in interest rates.
Carney said Canada’s automotive sector could survive Trump prices but would require “access to other markets”, and the country had to “reinvent the automotive sector and rebuild [and] reward ”.
He recently went to London and Paris, his first trip as Prime Minister, with the aim of strengthening trade with other partners following American hostilities.
Carney, who is in the midst of a national electoral campaign before a vote on April 28, said that he would speak to Trump the next day or two. “
Some members of the Canadian cabinet could also go to Washington to meet their counterparts, he said.
He added that the American President’s prices “would end up injuring American workers and American consumers.”
