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Canada responds to Trump tariffs with 25% levy on US auto exports

Prime Minister Mark Carney said revenue will be used to support Canadian auto workers.
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After President Donald Trump announced on Wednesday that tariffs will go into effect for virtually all imports, leaders of some of the United States' largest trading partners responded by stating that they are preparing to escalate the trade war.

Canada itself was not targeted by President Trump's new round of tariffs on Wednesday; however, the president announced a 25% tariff on all auto imports, which is expected to heavily impact the Canadian auto industry. Canadian-made products were already subject to a 25% duty on items not compliant with the United States-Mexico-Canada Agreement.

In response, Canadian Prime Minister Mark Carney, who took the reins from Justin Trudeau last month, announced Thursday that Canada is imposing 25% tariffs on non-CUSMA compliant autos being sent from the U.S.

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"All revenues from these tariffs will be used to support our Canadian auto workers and their industry," Carney said.

Carney's reaction to President Trump's latest round of tariffs came as the U.S. Senate voted 51-47 to block President Trump from enacting new tariffs against Canada. All 47 Democrats were joined by four Republicans, including former Republican Senate Leader Mitch McConnell, in voting to block the tariffs against Canada.

President Trump also enacted a 20% tariff against the European Union. European Union President Ursula von der Leyen said the bloc of nations is now preparing its own set of tariffs against the U.S.

“I agree with President Trump that others are taking unfair advantage of the current rules," she said. "And I am ready to support any efforts to make the global trading system fit for the realities of the global economy. But I also want to be clear: reaching for tariffs as your first and last tool will not fix it. This is why, from the outset, we have always been ready to negotiate with the United States to remove the remaining barriers to transatlantic trade."

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Tariffs are an import tax imposed on companies when products cross international borders. Some economists believe companies will tend to pass the cost of tariffs on to consumers.