By bizn_fun 
Many US car companies have operations in Canada, set up under the terms of a longstanding free trade agreement, and supply chains are highly integrated.
The United States-Canada-Mexico (USMCA) free trade agreement is up for review this year. But the agreement’s original purpose, of removing tariffs across North America, was no longer the current objective of the US administration, Carney said at a car plant in Toronto on Thursday. “Their approach has changed.”
“We have to prepare for all possibilities,” he added.
Thousands of Canadian auto workers have lost their jobs since Trump returned to the White House, as major carmakers including General Motors and Stellantis have scaled back their production in Canada.
Among Carney’s initiatives unveiled on Thursday is a new tariff scheme offering credits to car companies like General Motors and Toyota that produce vehicles in Canada, to help offset tariff costs.
Canadian officials, faced with upheaval in their trading relationship with the US, have in recent weeks looked to other countries in a bid to boost the Canadian auto sector and reduce its ties to the US.
Carney’s announcement on Thursday follows a deal with China last month that will see Canada ease tariffs on Chinese electric vehicles that it imposed in tandem with the US in 2024.
Canada also unveiled an agreement with South Korea last month that is set to encourage Korean car manufacturing in the country. Both agreements could undercut US car firms.