Canada imposing 25% tariff on some US auto imports

Canada said it would impose a 25 percent tariff on tens of thousands of vehicles imported from the United States, retaliating against US President Donald Trump's levies that came into effect on Thursday.

Prime Minister Mark Carney announced "25 percent tariffs on all vehicles imported from the United States that are not compliant with CUSMA," using the Canadian acronym for an existing North American free trade agreement.

The tariffs on Can$35.6 billion (US$25.3 billion) worth of US vehicles are to come into force in the coming days, his office told AFP.

The Canadian tariffs will impact cars and light trucks that are made with less than 75 percent North American parts -- roughly 10 percent of all vehicles shipped from the United States to Canada, or about 67,000 vehicles annually.

Canada was largely spared from the sweeping global tariffs Trump announced Wednesday, as Washington granted an exemption to goods compliant with the US-Canada-Mexico free trade agreement, which covers most products.

But Canada, which is one of America's largest trading partners, is still facing tariffs on steel, aluminum and other products, in addition to the levies on automobiles.

Carney said Trump's trade war "will rupture the global economy."

"The system of global trade anchored in the United States that Canada has relied on since the end of the Second World War... is over," Carney said.

"The 80-year period when the United States embraced the mantle of global economic leadership, forged alliances rooted in trust and mutual respect, championed the free and open exchange of goods and services is over," he added, calling the development "a tragedy."

Ottawa has previously imposed retaliatory tariffs on Can$30 billion worth of US consumer goods and nearly Can$30 billion of US steel and aluminum imports into Canada.

Carney and Trump spoke by phone last week. They agreed Washington and Ottawa should negotiate the future of bilateral trade after Canada's April 28 election.

Macron calls for suspension of investment in US

French President Emmanuel Macron on Thursday called for a suspension of investment in the United States until Donald Trump's "brutal and unfounded" new tariffs against Europe and the rest of the world were clarified.

His comments followed President Trump imposing sweeping new levies on US trading partners, including a 20 percent tariff on imports from the European Union.

"Future investments, investments announced in the last weeks, should be suspended for a time for as long as the situation with the United States is not clarified," Macron told a meeting of French companies also attended by French ministers and Prime Minister Francois Bayrou.

Macron predicted Americans will be "weaker and poorer" after Trump's tariff announcement, which he described as "brutal and unfounded" and which would have a "massive impact" on the European economy.

He also called on Europe to stand together in terms of their response, warning against any unilateral action.

Macron reaffirmed the French government's position that a "European response" would come in "two stages".

One would come in mid-April, addressing US tariffs already in place on steel and aluminium. The second would be at the end of April and would be a "more massive response, to the tariffs announced," after a study of the sectors affected and coordination with EU member states.

- "The world is reorganising" -

Following the meeting, the head of French employers' federation Medef, Patrick Martin, stressed the situation was "very serious".

Everyone agreed that "the world is reorganising, trade relations are becoming extremely brutal, threats are accumulating, and the time has come more than ever to accelerate simplification and competitiveness at the European and French level," he said.

Echoing Macron's call, business group France Industrie, which represents dozens of major companies, said French manufacturers affected by US tariffs should consider firing back one way or another, including by suspending investment projects in the US.

"To negotiate from a position of strength, we have to be ready to use all the levers at our disposal," said the group's president, Alexandre Saubot.

French Overseas Minister Manuel Valls called the US decision to impose different tariffs on France's overseas territories a "deeply political" gesture that reveals an "accumulation of inconsistencies, absurdities and incompetence".

The Paris stock market closed down more than three percent on Thursday after Trump's tariff blitz -- the biggest daily decline in two years.

Vincent Vicard, an economist at the Centre for Prospective Studies and International Information, told AFP that Trump's announcements "blow up" the "basic rules of international trade", but that the EU was well equipped to respond.

Among other measures, Vicard said EU countries could reduce its imports of goods and services, reduce market access for American companies, or even suspend property rights for certain companies.

Direct French investments in the United States were worth $370 billion in 2023, making it the fifth-biggest foreign investor in the country, according to the US Bureau of Economic Analysis (BEA).

In comparison, US direct investment in France the same year came to $142 billion, according to France's central bank. They are heavily weighted towards the manufacturing sector, France's treasury said.

The American Chamber of Commerce in France told AFP that there are more than 4,200 subsidiaries of French companies operating in the United States. According to the BEA, they employ some 741,000 people.