Members of Canada’s automotive industry are reacting with a mix of frustration, confusion, and concern to the new threats by U.S. President Donald Trump 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 the tariffs would increase to 50 percent from current levels starting January 1, 2027.
Lucas Malinowski, CEO of Global Automakers of Canada, expressed uncertainty about the seriousness of Trump’s statement. He mentioned that similar outbursts in the past did not always result in actual changes in tariff and trade policies. Malinowski’s industry group represents leading foreign automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
The threat to raise tariffs is the latest development in the Canada-U.S. trade conflict since negotiations collapsed before the deadline to avoid 50 percent U.S. tariffs on around $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” after September 8, focusing on various U.S. products including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
Trump criticized Canada in a social media post, claiming it is among the most challenging nations to deal with and accusing them of relying heavily on the U.S. for their business. Currently, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25 percent tariffs, while Canadian steel is subjected to tariffs ranging from 10 percent to 50 percent.
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 emphasized that the U.S. auto assembly would be responsible for paying the higher tariffs and warned that a threatened U.S. tariff on Canadian auto parts could disrupt auto assembly across the U.S.
The ongoing trade war has already impacted the automotive industry, with Malinowski highlighting a significant decline in U.S. exports to Canada and estimating that tariffs and trade disruptions have added $110 billion in costs to North America’s auto industry over the past year and a half.
Ontario Premier Doug Ford criticized Trump’s tariff threat, labeling him as arrogant and a bully. Ford emphasized the need to respond strongly to Trump’s actions, expressing determination to stand firm against the imposed tariffs.
