CANADIAN PM PLEDGES AUTO INDUSTRY FUND AGAINST TRUMP’S TARIFFS; JAPAN WEIGHS ALL OPTIONS

OTTAWA, March 27 (Bernama-Xinhua) -- Canadian Prime Minister Mark Carney on Wednesday announced a fund to bolster the country's auto industry against the tariff imposed by US President Donald Trump, reported Xinhua quoting local media reports.

The liberal leader, on his election campaign tour, called for a "strategic response fund" valued at C$2 billion (US$1.4 billion), reported CBC News.

According to the report, Carney said the money would be used to boost the auto sector's competitiveness, protect manufacturing jobs, help workers gain expertise and build "a fortified Canadian supply chain."

Carney's announcement came hours before Trump announced plans for a 25-per cent tariff on all vehicles not made in the United States as of April 2.

Auto parts often cross the border multiple times, and the added costs of tariffs and counter-tariffs would quickly snowball, said the report.

Carney called that a "huge vulnerability" and promised to build an "all-in-Canada" manufacturing network to build more car parts domestically, limiting how often they cross the border during production, said the report.

"In the new world, that will be an advantage," he was quoted as saying. "That will help insulate us from President Trump's trade threats and it will grow the economy."

 If elected on April 28, Carney said his government would also prioritise and procure Canadian-built vehicles, reported CBC News. 

Meanwhile, Japanese Prime Minister Shigeru Ishiba said in Tokyo on Thursday that Japan will consider an appropriate response against US tariffs on imported automobiles, vowing that all options are on the table.

Ishiba made the statement in response to a question at the House of Councillors' Budget Committee regarding Trump’s additional tariff on imported automobiles next month.

Citing Japan's contributions to the US economy through investment and job creation, Ishiba questioned the fairness of a uniform tariff increase for all countries.

Meanwhile, Mexico’s Monex Financial Group warned Wednesday that the proposed tariff on auto imports could raise production costs for Mexico and Canada, adding pressure to an already strained global auto industry. 

In a sectoral analysis, Monex said recent US tariffs on steel and aluminum imports, imposed on March 12, are already disrupting trade flows and supply chains.

Mexico and Canada together accounted for nearly 40 per cent of US steel imports in 2023 and also supply about 29 per cent of America's imported vehicles, Monex noted.  An additional 25 per cent auto tariff would significantly impact pricing and availability.

For Mexico, the tariffs could hit exports worth 4.7 per cent of its total trade and over 1.5 per cent of its GDP, according to the report.

Industry estimates suggest the move could add up to US$3,000 to the average cost of a car in the United States, potentially reducing 2025 sales.

Only vehicles meeting the 75 per cent regional content rule under the USMCA trade agreement would be exempt.

--BERNAMA-XINHUA