Members of Canada’s automotive industry are reacting with a combination of annoyance, uncertainty, and apprehension to President Donald Trump’s latest threats to double certain American tariffs on vehicles, auto parts, and steel from Canada. Following Canada’s rejection of a U.S. trade proposal last Friday, Trump announced on Truth Social that tariffs would increase to 50 percent from current levels starting January 1, 2027.
Lucas Malinowski, CEO of Global Automakers of Canada, expressed difficulty in gauging the seriousness of Trump’s statement. He mentioned that similar outbursts in the past did not always result in actual changes to trade policies, and they are monitoring the situation to see if this threat will materialize. The industry group represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s escalation of tariffs is the latest development in the ongoing trade tension between Canada and the U.S. since negotiations failed before the midnight deadline last Friday to avoid 50 percent U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” starting September 8, focusing on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In a Monday morning post, Trump criticized Canada, labeling it as “among the worst Nations in the World to deal with,” asserting that the country relies heavily on the U.S. for 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 threatened by Trump would be borne by the U.S. auto industry, not Canadians. He emphasized that the importer of record pays the tariffs, and any tariff on Canadian auto parts would impact U.S. auto assembly, potentially halting production across the U.S.
The ongoing trade dispute has already impacted the automotive sector significantly, according to Malinowski. He highlighted that Canada is the largest market for U.S.-made cars, with exports to Canada falling by 22 percent and $7 billion over 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 criticized Trump’s tariff threat, stating that the U.S. president can “kiss my ass” and calling him a bully. Ford emphasized the need to retaliate strongly against Trump’s actions, noting that the president’s behavior is arrogant and that he will face consequences for his actions.