Canadian Prime Minister Mark Carney made a commitment to activate trade countermeasures against the United States if President Donald Trump introduces auto tariff regimes. The statement emerges during Trump's proposed 25% tax on imported cars while markets face rising risks from an international trade conflict.

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At his media appearance Prime Minister Mark Carney announced Canada will reveal its countermeasures sometime next week when the auto tariff implementation and retaliatory measures targeting U.S. trading partners become effective.

Canada will deliver countertrade measures against U.S. tariffs which will affect the United States most strongly and have minimal impact on Canadian markets according to Carney.

Also Read | Trump's auto tariffs trigger global industry turmoil, threatening higher prices and job losses

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Multiple nations denounced the newly proposed tariffs because Europe announced their readiness to counter with reciprocal trade measures. The automobile taxes will result in major price hikes for vehicles in the United States which stands in opposition to Trump's initial pledge for cheaper consumer prices. Ferrari led the automotive sector by revealing higher prices which other manufacturers also anticipate rolling out.

When the announcement was made it caused the stock market to react strongly and auto stocks immediately dropped in value. Both General Motors and Ford suffered from major stock declines together with auto parts manufacturers who experienced decreases in value. The market reacted positively to Tesla because investors thought its domestic production stored against potential threats.

Major U.S. trading partners such as Mexico along with Japan and South Korea and Canada and Germany face significant harm from these automotive tariffs that were introduced as a U.S. trade policy against them.

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The Canadian government under Carney plans to spread its economy and minimize its market dependence on the United States. According to the economic expert the country needs to decrease its dependence on United States markets.

However, this shift may prove challenging, as vehicles constitute Canada's second-largest export, with the vast majority destined for the U.S.

The tariffs have also drawn strong reactions from European leaders. German Chancellor Olaf Scholz criticised the move, stating that it would lead to "only losers." French Finance Minister Eric Lombard described it as "very bad news," advocating for EU retaliatory tariffs.

Even Britain, seeking an exemption, threatened to review subsidies for Tesla, a company led by Trump advisor Elon Musk. Tesla, despite its domestic production, acknowledged that the tariffs would still have a "significant" impact.