Members of the Canadian auto industry are reacting with a blend of annoyance, uncertainty, and apprehension to the recent threats by U.S. President Donald Trump to double certain American tariffs on vehicles, trucks, auto parts, and steel from Canada. Following Canada’s rejection of a U.S. trade proposal last Friday, Trump announced on Monday via Truth Social that the tariffs would be increased to 50 per cent starting January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed difficulty in gauging the seriousness of Trump’s announcement. He mentioned that similar outbursts in the past did not always result in changes to tariff and trade policies. Malinowski, whose industry group represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz, emphasized the potential negative impacts on both the Canadian and American auto sectors if such measures were implemented.
Trump’s latest tariff threat is seen as a continuation of the Canada-U.S. trade war that intensified following failed negotiations before the recent deadline to prevent significant U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” post-September 8, targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in Canada’s response.
In his criticism of Canada on Monday, Trump labeled the country as “among the worst Nations in the World to deal with,” claiming that they heavily rely on the U.S. for business. Currently, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25 per cent tariffs, while Canadian steel is subjected to tariffs ranging from 10 per cent to 50 per cent.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs threatened by Trump would be borne by the U.S. auto industry, not Canadian entities. He emphasized that U.S. auto assembly would be the one paying the higher tariffs, potentially leading to production halts without the necessary Canadian auto parts.
The escalating trade tensions have already impacted the auto industry, with Malinowski highlighting a significant decrease in U.S. exports to Canada and estimating that tariffs and trade disruptions have collectively added $110 billion in costs to North America’s auto sector over the past 18 months.
Ontario Premier Doug Ford criticized Trump’s tariff threats, describing him as arrogant and a bully, and emphasizing the need for a robust response to such actions. Ford expressed his defiance, stating that Trump will face consequences for his behavior.