Ottawa, Mar 29 (V7N) – Canadian Prime Minister Mark Carney has declared that the longstanding economic and security relationship between Canada and the United States is effectively over, citing the impact of newly imposed tariffs by the U.S. government.

Speaking to reporters in Ottawa after a cabinet meeting, Carney stated that Canadians must reassess their economic approach following U.S. President Donald Trump's announcement of a permanent 25% tariff on imported automobiles and auto parts. The tariffs on cars will take effect on April 2, while the tariff on auto parts is expected to be implemented in May or later.

In response to the U.S. move, Carney confirmed that Canada will impose retaliatory tariffs affecting American goods. He stressed that the Canadian government and business sector must collaborate to restructure and sustain the country’s auto industry in the face of these challenges.

“The most important economic agreement of my lifetime was the Canada-U.S. Automotive Products Agreement, signed in 1965,” Carney said. “These new tariffs have now effectively killed that deal.”

Experts predict that the U.S. tariffs could have severe economic repercussions, increasing the price of imported vehicles by thousands of dollars and disrupting supply chains for automakers dependent on imported components. Industry analysts warn that both manufacturers and consumers will feel the impact of these measures.

Carney and Trump have held discussions in an attempt to reduce tensions and negotiate a new trade framework. Both leaders have agreed to comprehensive negotiations to redefine the economic and security relationship between the two nations. These discussions are expected to begin after Canada’s snap federal election on April 28.

The escalating trade tensions have become a major issue in Canada’s upcoming snap election. Carney, who replaced Justin Trudeau as Liberal Party leader and Prime Minister in March 2025, is seeking a mandate to navigate the country through these economic challenges.

With Canada’s economy heavily reliant on trade with the U.S., political and business leaders are now under pressure to find new trade alliances and domestic economic solutions to mitigate the impact of these tariffs.

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