Members of Canada’s automotive sector are expressing a blend of irritation, uncertainty, and apprehension in reaction to U.S. President Donald Trump’s recent warnings about potentially doubling certain American tariffs on Canadian cars, trucks, auto components, and steel.
Following Canada’s rejection of a trade proposition from the U.S. last Friday, Trump announced on Truth Social on Monday that the tariffs could surge to 50 percent from their current rates starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, conveyed that it is challenging to gauge the seriousness of Trump’s statement for stakeholders in the industry. He mentioned that previous outbursts of a similar nature did not always result in alterations to tariff and trade policies, and they are now observing if this instance will be any different.
The industry group led by Malinowski represents prominent foreign automakers like Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz. Malinowski emphasized that a move of this nature would be deeply troubling for the Canadian automotive sector and severely damaging for the American automotive industry as well.
Trump’s threat to raise these tariffs marks the latest escalation in the trade conflict between Canada and the U.S. ever since negotiations collapsed before the midnight deadline last Friday to prevent 50 percent U.S. tariffs on approximately $28 billion worth of Canadian goods.
Prime Minister Mark Carney vowed on Saturday to match American tariffs “dollar for dollar” after September 8, focusing on U.S. steel, dairy products, appliances, agricultural machinery, pulp and paper, and electronics in Canada’s response.
In a Monday morning post, Trump continued to criticize Canada, labeling it as “among the worst Nations in the World to deal with.” He asserted that Canada is dependent on the U.S., engaging in 95% of its business with the country.
At present, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25 percent tariffs in the U.S., while Canadian steel confronts tariffs ranging from 10 percent to 50 percent.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, clarified on Monday that it would be the U.S. auto industry, not Canadians, who would bear the brunt of the increased tariffs Trump is threatening. He highlighted that the importer of record shoulders the tariffs, emphasizing that a potential U.S. tariff on Canadian auto parts would be covered by U.S. auto assembly, potentially leading to halts in auto production across the U.S.
Volpe anticipated that members of the U.S. auto industry would reach out to the White House promptly in response to the situation.
Malinowski underscored that the ongoing trade dispute has already cast a shadow on business operations. He noted that Canada stands as the largest market for American-made vehicles, surpassing the combined value of the next three export markets. U.S. exports to Canada have plummeted by 22 percent and $7 billion over the past year, reflecting the impact of tariffs and trade disruptions.
The total costs incurred by North America’s automotive industry due to tariffs and trade interruptions over the last year and a half are estimated at $110 billion, according to Malinowski.
Ontario Premier Doug Ford also weighed in on Trump’s tariff ultimatum, expressing strong discontent and referring to the U.S. president in derogatory terms. Ford emphasized the need to respond assertively to Trump’s actions, labeling him as a bully who will face consequences for his behavior.