Canada is moving to reduce its dependence on the U.S. and protect its domestic auto industry as tariff negotiations with the Trump administration continue.
The details: Canadian Industry Minister Mélanie Joly said the country will fight vigorously to safeguard its auto economy and workers through a series of new initiatives, reports CBC.
Canada is developing a new industrial strategy aimed at opening additional export markets and prioritizing domestic procurement in response to U.S. tariffs.
Canadian companies are already shifting more exports to Europe in an effort to ease reliance on U.S. trade.
The Liberal government “will fight for every single job in the auto sector,” said Joly, reports CBC. “These are our jobs, these are our people, and we’ll make sure that we stand with them [and] that we work with them.”
Minister Mélanie Joly
Why it matters: Canada entering trade negotiations with less dependence on U.S. markets means they have more leverage to demand favorable terms on the auto trade agreement currently being renegotiated. If they succeed in building alternative export markets and prioritizing domestic procurement, the integrated North American production system that's kept costs down for decades starts to fracture.
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Between the lines: Despite diverging positions on tariffs, ongoing talks between Canada and the U.S. are centered on three key areas, according to Canadian Prime Minister Mark Carney.
Negotiations include a deal covering the steel, aluminum, and energy sectors.
The terms of the existing auto trade agreement are a second focal point.
Tariffs imposed on Canada’s forestry sector (considered punitive by Canadian officials) are also on the table.
Joly, who attended last week’s White House meeting with Carney as part of the trade discussions, said she believes negotiations are “going ahead in the right direction.”
Bottom line: Canada’s strategy to fortify its auto sector and lessen reliance on the U.S. could have wide-reaching effects, reshaping North American supply chains and influencing vehicle pricing, inventory, and competitiveness across the retail dealership landscape.
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