File Photo/THE CANADIAN PRESS

By Canadian Press

TRADE WAR

Carney says Trump’s office reached out to schedule a call as trade war continues

Mar 27, 2025 | 5:40 PM

Prime Minister Mark Carney is set to have his first phone conversation with U.S. President Donald Trump in the coming days, and Trump’s commerce secretary said Canada may get some reprieve from automobile tariffs.

Carney said Thursday that the president’s office reached out the previous evening to schedule a call. It would be the first conversation between the two leaders since Carney was sworn in as prime minister earlier this month as Trump pursued his trade war and repeatedly called for Canada’s annexation.

“I appreciate this opportunity to discuss how we can protect our workers and build our economies,” Carney said from Parliament Hill. “I will make clear to the president that those interests are best served by co-operation and mutual respect, including of our sovereignty.”

The call, which Carney said will take place within days, comes after Trump signed an executive order Wednesday to implement 25 per cent levies on all automobile and auto part imports — his latest move to upend global trade through a massive tariff agenda that pushed some automakers’ stock prices down on Thursday.

But Canadian cars may not be hit as hard as others. Ontario Premier Doug Ford said Thursday that U.S. Commerce Secretary Howard Lutnick told him in a phone call Wednesday night that Canadian-made vehicles with 50 per cent or more American parts will not face the tariffs.

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Ford said it was a productive conversation and Lutnick “knows how integrated the auto trade is” between the two countries — but the provincial government still doesn’t know when Canadian vehicle production might see the tariff break.

“A lot of the automobiles that are manufactured here in Ontario have 50, 60 per cent parts from the U.S.,” Ford said.

Ford said he’ll wait to respond to the latest tariffs until after April 2, when Trump is set to implement what he calls “reciprocal” tariffs by increasing U.S. duties to match the tax rates that other countries charge on imports.

Despite Lutnick’s reassurance, Trump has since escalated his threats against Canada. He posted on social media Thursday that 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.”

The Canada-U.S.-Mexico Agreement on trade, also called CUSMA, was negotiated during the first Trump administration to replace the North American Free Trade Agreement. It boosted rules requiring that a majority of parts in an automobile be North American in order for the vehicle to be tariff-free.

Trump praised CUSMA at the time it was negotiated as the “best agreement we’ve ever made” — but experts say his expanding tariff assault on Canada and Mexico is undermining the trade pact.

Trump signed the executive order Wednesday to implement duties on automobile imports starting April 3. A fact sheet provided by the White House said automobiles imported under CUSMA will only be tariffed on the value of content not made in the United States.

The executive order also imposes tariffs on certain auto parts, including engines, transmissions and electrical components. The fact sheet said automobile parts under CUSMA will not be tariffed until a process is created to identify non-U.S. content.

The president’s tariffs and ongoing talk of annexation have become top political issues in Canada ahead of the April 28 general election vote. Carney interrupted his campaign to return to Ottawa to lead a meeting of the Canada-U.S. relations cabinet committee on Thursday.

Speaking at a campaign event in Coquitlam, B.C., Conservative Leader Pierre Poilievre said his message to Trump is “stop attacking America’s friends.”

“We will never be the 51st state, but we can, once again, be friends with the United States if the president reverses course on these disastrous tariff threats,” Poilievre said.

NDP Leader Jagmeet Singh called mounting tariffs an “illegal trade war” at a campaign stop in Windsor, Ont., and said it feels like “a betrayal, a gut-punch for absolutely no reason.”

Trump moved forward earlier this month with 25 per cent tariffs on all steel and aluminum imports into the U.S., including Canadian products.

He also launched — then partially paused — economywide tariffs against Canada and Mexico. It’s not clear whether those sweeping tariffs, which Trump has linked to the flow of fentanyl, are set to return next week.

Trump has said his tariffs are aimed in part at compelling companies to manufacture goods in the U.S. Manufacturers have said redistributing the North American automobile industry would not be easy.

Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, said in a media statement said “the result is higher costs for manufacturers, price increases for consumers, and a less competitive industry.

MichAuto executive director Glenn Stevens Jr. said the tariffs will be felt across the American supply chain.

“This means jobs lost, increased input costs and pressure on the balance sheets of companies large and small,” said Stevens Jr., who represents the automobile sector in Michigan.