Members of Canada’s automotive industry have expressed a range of emotions in response to U.S. President Donald Trump’s recent threats to double certain American tariffs on vehicles, auto parts, and steel imported from Canada. Following Canada’s rejection of a U.S. trade proposal, Trump announced on Truth Social that tariffs would increase to 50% from the current levels starting on January 1, 2027.
Lucas Malinowski, CEO of Global Automakers of Canada, stated that it is uncertain how seriously industry stakeholders should take Trump’s announcement. He mentioned that similar outbursts in the past did not necessarily result in changes in tariff and trade policies, and they are waiting to see if this threat will materialize. Global Automakers of Canada represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s warning to raise tariffs is the latest development in the Canada-U.S. trade conflict following failed negotiations before the deadline to avoid 50% U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” after September 8, focusing on various sectors like steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In his criticism of Canada, Trump described the country as one of the most difficult to deal with globally. He emphasized that the U.S. holds significant leverage in trade with Canada, conducting 95% of its business with the neighboring country. Currently, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25% tariffs, while Canadian steel is subject to tariffs ranging from 10% to 50%.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs would be borne by the U.S. auto industry, not Canadians. He explained that the importer of record is responsible for paying the tariffs, meaning U.S. auto assemblers would incur the additional costs. Volpe anticipated discussions between members of the U.S. auto industry and the White House regarding the situation.
Malinowski highlighted the negative impact of the ongoing trade war on the automotive sector, noting a significant decline in U.S. exports to Canada. He estimated that tariffs and trade disruptions have collectively added $110 billion in costs to North America’s auto industry over the past 18 months.
Ontario Premier Doug Ford criticized Trump’s tariff threats, calling him arrogant and a bully. Ford emphasized the need to stand firm against such actions and expressed confidence that Trump would face consequences for his behavior.
