Canada has rolled out a C$6.2 billion (€5.7 billion) package to cushion its steel and automotive industries from the impact of US tariffs, with Prime Minister Mark Carney warning that the decades-old trade partnership with Washington has been fundamentally changed.
Presented alongside Ontario Premier Doug Ford in Ottawa on Wednesday, the plan allocates C$3.7 billion (€3.4 billion) to steel producers and C$1.8 billion (€1.65 billion) to automakers over five years. The federal government will contribute C$1.1 billion (€1 billion) of the auto-sector funding.
The announcement came on the same day that US-owned Cleveland-Cliffs confirmed layoffs at its Hamilton, Ontario, plant, underscoring the human toll of the trade dispute.
“US tariffs have upended a trade bargain that’s existed for decades,” Carney said. “They’ve raised costs for American families while putting Ontario workers and businesses at a disadvantage.”
The damage is already visible in trade data: Canadian auto exports to the US have fallen by more than 10 percent, while US exports to Canada have dropped by over 20 percent. Carney stressed that the tariffs hurt both economies. “Tariffs make both our industries weaker and reduce choice for our families,” he said.
A relationship in flux
Carney confirmed he had a lengthy phone conversation with President Trump on Wednesday, covering trade, Iran, and the Middle East. He indicated no breakthrough but said Canada remains open to negotiations. Talks collapsed in August after Trump imposed 50 percent tariffs on roughly C$20 billion (€18.4 billion) of Canadian goods, prompting retaliatory measures from Ottawa.
Ford was blunt about the state of bilateral ties. “No matter what happens in the midterms, no matter who sits in the White House, we’re not going back to the way things were,” he said.
Carney has set a goal of doubling Canadian exports to non-US markets within a decade, acknowledging that Washington’s priorities have shifted. “Their approach has changed,” he said. “So must ours.”
The diplomatic temperature rose further when the US Embassy accused Canadian politicians of trying to influence next month’s American midterm elections. The embassy named Industry Minister Mélanie Joly for discussing retaliatory tariffs targeting Republican states, and Ford for airing a US television ad featuring former President Ronald Reagan criticising tariffs—the ad that prompted Trump to walk away from trade talks in October 2025.
Both leaders rejected the allegations, as did independent analysts. “The implicit assumption that Canada could significantly alter the outcome of the midterms is absurd,” said Daniel Béland, a political science professor at McGill University.
The package is part of a broader Canadian strategy to diversify trade and reduce reliance on the US market. As Alberta's rejection of separation has shown, Trump's pressure has paradoxically united Canadians behind Carney. The prime minister's push to expand exports to Europe and Asia mirrors similar efforts by EU member states to reduce dependencies on single trading partners.
For European observers, the dispute is a reminder of the fragility of transatlantic trade alliances. The EU has faced its own tariff battles with Washington, and Canada's experience offers lessons in resilience. As Trump's overtures to Putin deepen the transatlantic rift, Europe is watching closely how Canada navigates this new reality.
Carney's government is also exploring new trade agreements with European partners, aiming to strengthen ties beyond North America. The US investment push in Central Asia shows that Washington is pivoting its economic focus elsewhere, making Canada's diversification strategy all the more urgent.
As the midterms approach, the trade dispute remains a central issue in Canadian politics. Carney's package is designed to provide immediate relief while laying the groundwork for a more resilient economy. Whether it will be enough to offset the long-term damage remains to be seen.
