Members of Canada’s automotive industry are reacting with a combination of frustration, uncertainty, and worry in light of U.S. President Donald Trump’s recent threats to double certain American tariffs on vehicles, auto parts, trucks, and steel originating from Canada. Following Canada’s rejection of a U.S. trade proposal, Trump took to Truth Social on Monday to announce that tariffs would potentially increase to 50 per cent starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed uncertainty regarding the seriousness of Trump’s statement. He mentioned that similar outbursts in the past did not always result in actual changes to tariff and trade policies. Malinowski’s industry group represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s threat to raise tariffs marks the latest development in the ongoing Canada-U.S. trade tensions that escalated after negotiations collapsed before the Friday deadline to avert 50 per cent tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” effective September 8, focusing on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in Canada’s retaliatory response.
In a subsequent social media post, Trump criticized Canada, labeling it as “among the worst nations in the world to deal with.” He emphasized that Canada heavily relies 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, 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 by Canadians. He emphasized that the “importer of record” would be responsible for the tariffs, indicating that U.S. auto assembly plants would be impacted without the necessary Canadian auto parts.
Malinowski highlighted that the trade dispute has already impacted business operations. He noted that Canada serves as the largest market for U.S.-made cars, surpassing the combined value of the next three export markets. U.S. exports to Canada have declined by 22 per cent, equating to $7 billion over the past year. Malinowski estimated that tariffs and trade disruptions have collectively added $110 billion in costs to the North American automotive industry over the last 18 months.
Ontario Premier Doug Ford condemned Trump’s tariff threats, characterizing him as a bully and emphasizing the need for a robust response. Ford criticized Trump’s demeanor and expressed confidence that the U.S. president would face consequences for his actions.