OTTAWA/MONTREAL (Reuters) - Canadian Prime Minister Justin Trudeau on Wednesday said he doubted whether U.S. President Donald Trump would carry out a threat to impose tariffs on autos, given the economic damage such a move would cause.
Trump has already slapped tariffs on steel and aluminium from Canada on national security grounds and is threatening similar punitive measures against autos, which would badly hurt the Canadian economy.
Trudeau told a news conference that given the closely integrated nature of the North American auto industry, any action against Canada would hurt U.S. companies and workers.
“I have a hard time accepting that any leader might do the kind of damage to his own auto industry that would happen if he were to bring in such a tariff on Canadian auto manufacturers,” he said in his most expansive comments on the topic to date.
Canada is considering all options, including providing financial aid to the auto industry if necessary.
Canadian officials say they believe Trump is using the threat in a bid to wrest concessions from Canada at slow-moving talks to update the North American Free Trade Agreement.
Relations between the two leaders hit a new low this month after a Group of Seven summit when Trump - taking exception to what Trudeau had said about tariffs - called the Canadian leader weak and dishonest.
Trudeau shrugged off the attack, saying there would always be challenges in the bilateral relationship.
“As politicians we develop thick skins and I stay focussed on what we need to do to advance the common causes we have. I’m not going to react to personal comments,” he said.
Earlier in the day, in a sign tensions might be easing, a senior official welcomed comments by U.S. Commerce Secretary Wilbur Ross to the effect that Canadian steel did not pose a direct security threat.
Ross, speaking to a U.S. Senate committee, said Washington was most concerned about overall steel imports.
“I was pleased to see, according to reports, Secretary Ross acknowledged that Canadian steel does not pose a security threat to the United States,” Canadian Foreign Minister Chrystia Freeland said in Montreal.
Ross linked the tariffs to progress in the NAFTA talks, which have stalled as Canada and Mexico balk at far-reaching U.S. demands for change.
Freeland predicted there would be moments of drama ahead while saying she remained confident the three nations could still strike a deal.
Additional reporting by Matt Scuffham in Toronto; Editing by James Dalgleish