Canada was one of the ‘winners’ yesterday but that ignores auto tariffs, steel, aluminum and products not covered under USMCA. So while the news could have been worse, there is still plenty of pain to come.

With that in mind, Carney isn’t in the mood to back down:

• Canada will impose 25% tariffs on all vehicles imported from the US that are not compliant with USMCA
• Will develop framework for auto producers to avoid counter-tariffs, as long as they maintain their production and investment in Canada
• Tariffs will not affect auto parts and will not affect vehicle content from Mexico
• Every single dollar raised — about $8 billion — will go to auto workers and affected companies
• We will fight these tariffs until they are removed
• We would react energetically to any new US tariffs
• Until the pain caused by tariffs becomes impossible for the Trump admin, I do not believe they will change direction
• Not at this time planning to co-ordinate a response with other countries

The bolded part is an interesting strategy. It’s a threat to hit companies who move factories out of Canada and into the US.

He also said that ‘previously announced’ retaliatory tariffs will remain in effect. Now that’s a bit confusing and I’m going to look for clarity because there are $30 billion in tariffs already implemented or the $155 billion that was scheduled for March 25 but were paused until April 2. I’m guessing those are still paused but it’s hard to tell right now.

This article was written by Adam Button at www.forexlive.com.