Members of Canada’s automotive industry are expressing a mix of dissatisfaction, uncertainty, and alarm in response to President Donald Trump’s recent threats to double certain American tariffs on vehicles, trucks, auto parts, and steel from Canada. After Canada turned down a U.S. trade proposal late on Friday, Trump announced via Truth Social on Monday that the tariffs would increase to 50 percent from 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 statement for stakeholders in the industry. He mentioned that similar outbursts in the past did not necessarily result in changes in tariff and trade policies, and they are waiting to see if this threat materializes. The industry group he heads represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s declaration to raise these tariffs marks the latest development in the Canada-U.S. trade conflict since negotiations collapsed before the Friday midnight deadline to avert 50 percent U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney pledged on Saturday to match American tariffs “dollar for dollar” post-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.” He asserted that the country feels entitled, emphasizing the U.S.’s importance to Canada’s business. Currently, finished vehicles and non-CUSMA-compliant auto parts imported from Canada to the U.S. are subject to 25 percent tariffs, while Canadian steel faces tariffs ranging from 10 percent to 50 percent.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs Trump is threatening would be borne by the U.S. auto industry, not Canadians. He emphasized that the U.S. auto assembly, as the importer of record, would be responsible for paying the higher tariffs, which could halt auto assembly operations throughout the U.S. without the specific parts.
Malinowski highlighted the negative impact of the ongoing trade war on the industry, noting 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 sector over the past 18 months. Ontario Premier Doug Ford also condemned Trump’s tariff threat, describing him as a bully and expressing a firm stance against the imposition of additional tariffs.