Canada’s automotive industry members are reacting with a mix of annoyance, uncertainty, and worry to President Donald Trump’s recent threats to double certain American tariffs on vehicles, auto parts, and steel from Canada.
Following Canada’s rejection of a U.S. trade offer last Friday, Trump announced on Truth Social on Monday that the tariffs would increase to 50 percent from their current levels starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed difficulty in gauging the seriousness of Trump’s announcement for stakeholders in his sector.
“We’ve witnessed similar outbursts in the past that did not result in any changes to tariff and trade policies. We are waiting to see if this one will materialize,” he informed CBC News on Monday.
His industry association represents major international automakers like Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
“Such a move would be highly concerning for the Canadian automotive industry but also severely damaging for the American auto sector,” Malinowski remarked.
‘We’ve been over this’: Volpe
Trump’s threat to hike these tariffs is the latest development in the Canada-U.S. trade conflict following failed negotiations before the Friday midnight deadline to avert 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” post-September 8. Carney detailed that Canada’s retaliation will target U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In his Monday morning statement, Trump criticized Canada, labeling the country as “among the worst Nations in the World to deal with.”
“They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US! They conduct 95% of their business with the U.S.,” he asserted.
Currently, finished vehicles and non-CUSMA-compliant auto parts imported from Canada to the U.S. face 25 percent tariffs. Canadian steel is subject to tariffs ranging from 10 percent to 50 percent.
<p"On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%," Trump posted on Truth Social at 9:38 a.m. ET. "Canada has been ripping off the United States of America for years."
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified on Monday that the increased tariffs Trump is threatening would be borne by the U.S. auto industry, not Canadians.
“We’ve been over this. The ‘importer of record’ pays the tariffs,” Volpe noted. “A threatened US tariff on Canadian auto parts will be paid by US auto assembly. Without those specific parts, auto assembly throughout the US would halt.”
Volpe anticipates that members of the U.S. auto industry will communicate with the White House promptly.
Additional expenses for the entire auto industry
Malinowski highlighted that the ongoing trade dispute has already negatively impacted business operations.
<p"Canada is the biggest market for U.S.-manufactured cars, surpassing the combined size of the next three export markets," he stated. "U.S. exports to Canada have dropped by 22 percent and $7 billion in the past year."
Malinowski estimated that tariffs and trade disruptions have added $110 billion in costs to North America’s auto industry over the last 18 months.
Ontario Premier Doug Ford also chimed in on Trump’s tariff threat, stating to CBC News that the U.S. president can “kiss my ass.”
<p"We need to throw everything and the kitchen sink at them. He's arrogant, he's cocky," Ford expressed to CBC News.
“And that’s all Donald Trump is … a bully. Well, he’s going to have a rude awakening.”
