Canada Announces Bombshell Break With U.S. Over Trump
The new Canadian prime minister announced the two countries’ relationship is “over.”
Canadian Prime Minister Mark Carney officially broke things off with the United States Thursday, marking a seismic shift in relations between the longtime allies.
Canadian Prime Minister Mark Carney officially broke things off with the United States Thursday, marking a seismic shift in relations between the longtime allies.
“The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over,” Carney said during a press conference, following a meeting in Ottawa with his ministers to “discuss trade options” in response to Donald Trump’s “permanent” 25 percent tariffs on all imported vehicles and auto parts.
“What exactly the United States does next is unclear, but what is clear, what is clear is that we as Canadians have agency. We have power. We are masters in our own home,” Carney said.
“We can control our destiny. We can give ourselves much more than any foreign government, including the United States, can ever take away. We can deal with this crisis best by building our own strength right here at home.”
Carney warned that Canada, which is currently one of the top importers of U.S. goods, would need to reshape its economy to wean itself off its southern neighbor.
“We will need to dramatically reduce our reliance on the United States. We will need to pivot our trade relationships elsewhere. And we will need to do things previously thought impossible at speeds we haven’t seen in generations,” Carney said.
On Wednesday, Carney called the latest round of tariffs a “very direct attack.”
“We will defend our workers. We will defend our companies. We will defend our country,” he said at the time.
Back stateside, the Big Three automakers took an immediate hit Thursday as the market digested Trump’s tariff announcement, with new tariffs on vehicles expected to go into effect on April 3 and on vehicle parts one month later.
The White House has pretended that the steep tariffs on Canada are a bargaining chip to help curb illegal drug trafficking—a threat so minor that it warranted no mention in the Trump administration’s first Annual Threat Assessment—but Trump openly admitted that he hoped to use tariffs to bully Canada into becoming a U.S. state. His bullying has since escalated into an all-out trade war, which could potentially devastate states along America’s northern border.
Trump’s Latest Tariffs Are Already Wreaking Havoc on the Auto Industry
Automotive stocks are crashing following Donald Trump’s latest round of tariffs.
U.S. auto stocks opened down on Thursday after Donald Trump announced “permanent” 25 percent tariffs on “all cars that are not made in the United States.”
The Big Three automakers took an immediate hit as the market digested the announcement, with tariffs on vehicles expected to go into effect on April 3 and vehicle parts one month later.
General Motors stock fell more than 7 percent in morning trading on Thursday, and continued to fall to roughly 9 percent down.
Deutsche Bank analysts noted that General Motors is likely to be hit the hardest by Trump’s announcement because it has “the most exposure to Mexico.”
A little over half of General Motors vehicles sold in the U.S. during the first three quarters of 2024 were assembled in the U.S., according to Barclays analyst Dan Levy. Thirty percent were assembled in Canada and Mexico, and 18 percent were brought in from other countries.
While a lot of General Motors cars are assembled in the U.S., they rely heavily on imported parts.
Ford saw a smaller dip, losing only 2 percent in trading. “Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities although Ford does face incremental exposure on imported engines,” wrote the Deutsche Bank analysts. Seventy-eight percent of Ford vehicles are assembled in the U.S., while only 21 percent of U.S.-sold units are assembled in Mexico or Canada.
Stellantis, which assembles roughly 57 percent of its vehicles in the U.S., lost less than 2 percent in morning trading.
Meanwhile, Elon Musk’s Tesla saw a bump of 5 percent in morning trading, after Trump’s last round of tariff announcements and reference to a seemingly imminent economic recession sent the stock cratering earlier this month.
Trump told reporters Wednesday that tariffs, which have already started to tank the valuations of the Big Three automakers, would “continue to spur growth.”
Trump’s tariffs on vehicles and auto parts is the latest move in his escalating trade war with both Mexico and Canada, which is very likely to have dire and long-lasting economic impacts on America’s border states.
Federal Reserve Chair Jerome Powell confirmed that Trump’s tariffs will make inflation worse.
“You may have seen that goods inflation moved up pretty significantly in the first two months of the year.… Some of it—the answer is, clearly, some of it, a good part of it—is coming from tariffs,” Powell said.
Powell also noted that Trump’s tariffs have made it harder for the economy to achieve price stability for consumers and for the Fed to get back to its goal of 2 percent inflation.
“I think we were getting closer and closer to that. I wouldn’t say we were at that. Inflation was running around two and a half percent for some time,” Powell said. “I do think with the arrival of the tariff inflation, further progress may be delayed. The [Summary of Economic Projections] doesn’t really show further downward progress on inflation this year, and that’s really due to the tariffs coming in.”
We heard it from the horse’s mouth: Trump is shooting himself and every American consumer in the foot by levying aggressive tariffs on imports, all while promising to lower inflation. He’s insisting that he can have both. That couldn’t be further from the truth.
