Members of the Canadian auto industry are reacting with a mixture of frustration, confusion, and concern to the recent threats made by U.S. President Donald Trump to double certain American tariffs on cars, trucks, 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% from the current levels starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed uncertainty regarding the seriousness of Trump’s announcement. He mentioned that similar outbursts in the past did not necessarily result in changes to tariff and trade policies, and the industry is awaiting further developments. The group, which represents major non-domestic automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz, is closely monitoring the situation.
Trump’s threat to raise tariffs marks the latest escalation in the trade tensions between Canada and the U.S. since negotiations failed before the deadline to avoid 50% U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to retaliate by matching American tariffs “dollar for dollar” after September 8, focusing on various sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In a social media post, Trump criticized Canada as being difficult to deal with and claimed that the country heavily relies on the U.S. for business. Currently, imported finished vehicles and non-CUSMA-compliant auto parts face 25% tariffs, while Canadian steel is subjected to tariffs ranging from 10% to 50%.
Flavio Volpe, the 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 is responsible for paying the tariffs, and a tariff on Canadian auto parts would impact U.S. auto assembly operations significantly.
The ongoing trade dispute has already impacted the auto industry, with Malinowski highlighting a significant decline in U.S. car exports to Canada and estimating that tariffs and trade disruptions have added $110 billion in costs to North America’s auto sector over the past year and a half. Ontario Premier Doug Ford criticized Trump’s tariff threats, calling him arrogant and a bully, and emphasized the need to stand firm against such actions.
