Trump Threatens ‘Large-Scale Tariffs’ if Canada, EU Work Together on Trade Response to US

U.S. President Donald Trump speaks during a Women's History Month event at the White House in Washington, D.C., March 26, 2025. REUTERS/Carlos Barria

U.S. President Donald Trump says his administration will impose even larger tariffs on both Canada and the European Union if they coordinate a joint response against U.S. tariffs.

“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump said on his social network Truth Social on March 26.

Canada and the EU have not announced a coordinated response to Trump’s tariffs, while both have said separately that they will retaliate. Canada and the EU have discussed working together in other areas such as defence procurement, and Ottawa is seeking to expand its trade with Europe and Asia to reduce its dependence on the United States.

Trump announced 25 percent tariffs on all imported cars and some car parts on March 26. The tariffs will apply to passenger vehicles and light trucks, as well as “key automobile parts” like engines, transmissions, and electrical components, according to a fact sheet by the White House. Tariffs could be expanded to additional parts in the future.

Importers of automobiles under the United States-Mexico-Canada free trade agreement will be able to “certify their U.S. content,” thus allowing the 25 percent tariffs to only apply to the value of their non-U.S. content, the fact sheet said. Automobile parts compliant with the trade agreement will remain tariff-free until a process for applying tariffs to their non-U.S. content has been created.

Automobile tariffs are set to take effect April 3, the day after the U.S. imposes reciprocal tariffs on its trading partners, while the tax on auto parts will begin by May 3.

Liberal Leader Mark Carney responded to the tariff announcement on March 26 by calling it a “direct attack” on Canadian workers, and said Ottawa will consider retaliatory actions. Canada has already placed CA$30 billion in tariffs on U.S. goods in response to the previous 25 percent tariffs on Canadian products.

Carney said he planned to meet with his U.S.-Canada cabinet commitee on March 27 to discuss a response to the tariffs, and also told reporters it would be “appropriate” to speak with Trump soon.

Carney announced earlier March 26 that he would set up a $2 billion Strategic Response Fund to support the Canadian auto manufacturing sector as it faces U.S. tariffs.

Conservative Leader Pierre Poilievre responded to Trump’s auto tariffs by saying Canada must retaliate with tariffs targeting goods that Canada does not need, can make at home, or can import from elsewhere.

“Now is the time to take back control and relaunch our economy so that we can confront President Trump’s unjustified threats and tariffs from a position of strength,” he said.

The European Commission said on March 27 it is waiting for the U.S.’s reciprocal tariffs to take effect before deciding on any countermeasures.