Toronto (Canada) (AFP) – Prime Minister Mark Carney on Wednesday announced support for “all-in-Canada” auto manufacturing, escalating trade protection in response to US President Donald Trump’s threat to “shut down” the northern country’s auto industry. Carney detailed a CAN$2 billion ($1.4 billion) fund while campaigning ahead of Canada’s April 28 election in Windsor, with the US city of Detroit visible across the river behind him.
The highly-integrated North American auto industry, and specifically the free flow of parts between Detroit and Michigan during the manufacturing process, has been a focal point in Trump’s trade war. Gesturing to the suspension bridge that connects the cities, Carney noted that auto parts could cross the border “six times before assembly,” but warned Canada needed to prepare for a “new world.” “It’s not about waiting for the Americans to become more reasonable. It is about acting now,” Carney said. “What we need to do is build more of those autos, and more of each auto, right here in Canada,” Carney said.
His proposed fund will support efforts to build more car parts in Canada while limiting the number of parts that cross the border during production, a statement from Carney’s Liberal Party said. Trump has threatened, imposed, and withdrawn various tariffs on Canada’s auto industry, and his full plans for the sector remain unclear. New levies targeting auto parts from Canada could be part of his administration’s highly anticipated April 2 announcement on global reciprocal tariffs. The president has charged that Canada “stole” the US auto industry and said auto-makers that want to avoid tariffs should make cars in the United States.
Industry experts argue North America’s integrated manufacturing process, which includes Mexico, has developed to maximize efficiency. Carney, a former central banker, replaced Justin Trudeau as prime minister on March 14 and on Sunday triggered snap elections. At the start of the year, the Liberal Party appeared headed towards a crushing electoral defeat with the Conservatives poised to retake power after a decade in opposition.
But Trump’s trade war, his repeated threats to make Canada the 51st US state, and Trudeau’s departure have upended Canadian politics. Just over a month before the vote, pollsters are currently projecting a Liberal majority, a stunning reversal driven in part by a perception among some voters that Carney is the best leader to confront Trump.
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