Canada unveils $6.2bn package to shield steel and auto industries from US tariffs

Prime Minister Carney warns trade relationship with Washington 'permanently altered' as layoffs begin

By LineZotpaper

Published22 October 2026

Read Time2 min

Canada announced a $6.2 billion (€5.7 billion) aid package for its steel and auto sectors on Wednesday, as Prime Minister Mark Carney warned that US tariffs have 'upended a trade bargain that's existed for decades.' The plan, unveiled jointly with Ontario Premier Doug Ford, directs $3.7 billion to steelmakers and $1.8 billion to automakers over five years. The announcement came as US-owned Cleveland-Cliffs confirmed layoffs at its Hamilton, Ontario, plant, underscoring the human cost of the dispute.

Carney confirmed he spoke at length with President Trump on Wednesday, covering trade, Iran and the Middle East, but signalled no breakthrough. 'Their approach has changed,' Carney said. 'So must ours.' He set a target of doubling Canadian exports to non-US markets within a decade, acknowledging that an integrated North American auto industry may no longer be Washington's priority.

The damage is already visible in trade figures: Canadian auto exports to the US have fallen more than 10 percent, while US exports to Canada have dropped more than 20 percent. Carney stressed that tariffs make both industries weaker and reduce choice for families on both sides of the border.

For his part, Ford was direct about what the dispute has done to 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.

Talks collapsed in August after Trump imposed 50% tariffs on around $20 billion (€18.4 billion) in Canadian goods, prompting Canadian retaliation.

The day took a sharper diplomatic turn when the US Embassy issued a statement accusing Canadian politicians of seeking 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 running 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. So did independent analysts. 'The implicit assumption that Canada could significantly alter the outcome of the midterms is absurd,' said Daniel Béland, political science professor at McGill University.

Analysis

Why This Matters

The tariff dispute is hitting Canadian workers directly: Cleveland-Cliffs layoffs in Ontario show immediate job losses.
Canadian auto exports to the US have dropped more than 10 percent, and US exports to Canada have dropped more than 20 percent, indicating bilateral trade damage.
Carney's goal to double exports outside the US signals a strategic shift that could reshape North American supply chains.

Background

The US-Canada trade relationship, built over decades under the USMCA framework, has been upended by Trump's tariffs. In August, talks collapsed after Trump imposed 50% tariffs on roughly $20 billion in Canadian goods, prompting Canadian retaliation. Carney's government is now pursuing economic diversification, while the US has accused Canada of meddling in the upcoming midterm elections.

Key Perspectives

Canadian government: Views the tariffs as a 'permanent alteration' of the trade relationship and is protecting key industries with $6.2 billion in support while seeking new export markets. US administration: Has accused Canadian officials of trying to influence the November midterms by targeting Republican states with retaliatory tariffs and running ads critical of Trump's trade policy. Analysts and critics: Call the meddling accusation 'absurd,' noting that Canada is unlikely to have significant electoral impact. Some question whether the aid package is enough to sustain industries long-term.

What to Watch

Upcoming US midterm elections on November 3, 2026, and their potential effect on trade policy.
Further layoff announcements from US-owned plants in Canada, such as Cleveland-Cliffs.
Whether Carney's non-US export diversification target leads to new trade deals or investment shifts.

Sources

Canada unveils $6.2bn plan to shield manufacturers as Trump trade tariffs bite · Euronews

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

SupportedCanada unveiled a $6.2 billion package to shield its steel and auto industries from US tariffs.Euronews: “Canada has announced a $6.2 billion (€5.7 billion) package to protect its steel and auto industries from US tariffs”
Partly supportedCarney said the trade relationship was “permanently altered.”Euronews: “Prime Minister Mark Carney warned that Washington has permanently altered a trade relationship built over decades.”
Partly supportedLayoffs were beginning at Cleveland-Cliffs’ Hamilton plant as the package was announced.Euronews: “The announcement came the same day US-owned Cleveland-Cliffs confirmed layoffs at its Hamilton, Ontario, plant”
SupportedThe plan directs $3.7 billion to steelmakers and $1.8 billion to automakers over five years.Euronews: “directing $3.7 billion (€3.4 billion) to steelmakers and $1.8 billion (€1.65 billion) to automakers over five years”
SupportedUS-owned Cleveland-Cliffs confirmed layoffs at its Hamilton, Ontario, plant.Euronews: “US-owned Cleveland-Cliffs confirmed layoffs at its Hamilton, Ontario, plant”
SupportedCarney said, “US tariffs have upended a trade bargain that's existed for decades.”Euronews: ““US tariffs have upended a trade bargain that’s existed for decades,” Carney said.”
SupportedCarney said he spoke at length with Trump on Wednesday about trade, Iran and the Middle East.Euronews: “Carney confirmed he spoke at length with President Trump on Wednesday, covering trade, Iran and the Middle East.”
SupportedCanadian auto exports to the US fell more than 10 percent, while US exports to Canada fell more than 20 percent.Euronews: “Canadian auto exports to the US have fallen more than 10 percent, while US exports to Canada have dropped more than 20 percent”
SupportedTalks collapsed in August after Trump imposed 50% tariffs on around $20 billion in Canadian goods, prompting Canadian retaliation.Euronews: “Talks collapsed in August after Trump imposed 50% tariffs on around $20 billion (€18.4 billion) in Canadian goods, prompting Canadian retaliation.”
SupportedFord said, “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.”Euronews: ““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.”
SupportedThe US Embassy accused Canadian politicians of seeking to influence next month's American midterm elections.Euronews: “the US Embassy issued a statement accusing Canadian politicians of seeking to influence next month’s American midterm elections.”
SupportedDaniel Béland said, “The implicit assumption that Canada could significantly alter the outcome of the midterms is absurd.”Euronews: ““The implicit assumption that Canada could significantly alter the outcome of the midterms is absurd,” said Daniel Béland, political science professor at McGill University.”