MNI BRIEF: Canada Matching US Tariffs On Autos But Not Parts

Canadian Prime Minister Mark Carney said Thursday the government will match U.S. tariffs on automobiles but exclude parts that are vital to North America's integrated production lines, pledging further retaliation in coming weeks if Donald Trump moves further on what's he's called strategic industries like pharmaceuticals, lumber, semiconductors and farm products. 

The tariffs are a “clear violation of trade agreements” including the USMCA Trump negotiated in his first term, Carney said, adding there's little evidence of a rush of fentanyl shipments used to justify some of the measures. Canada will contest the tariffs until they are removed, he said. 

Wider U.S. tariffs announced Wednesday “will rupture the global economy and adversely affect economic growth” and cut U.S. payrolls, said Carney, the former BOE and BOC Governor. Canada's expected CAD8 billion of tariff revenue will go to workers hurt by the trade war, which he said poses "significant threats to Canadian workers and Canadian businesses." (See MNI INTERVIEW: Canada Factories Suffer From US Tariff Threats)

Carney said Trump's tariffs are here for the long term rather than a short-term bargaining chip as some investors have suggested. “Until that pain becomes impossible to ignore, I do not believe they will change direction.”