Members of the Canadian auto industry are reacting with a blend of annoyance, perplexity, and alarm to the recent threats by U.S. President Donald Trump 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 the tariffs would increase to 50 percent from their current levels 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 necessarily 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.
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 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 response to Trump’s criticism of Canada as one of the “worst nations in the world to deal with,” Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the U.S. auto industry, not Canadians, would bear the brunt of the higher tariffs. Volpe explained that the importer of record is responsible for paying the tariffs, emphasizing that a threatened U.S. tariff on Canadian auto parts would impact the U.S. auto assembly.
Malinowski highlighted the detrimental effects the ongoing trade war has had on the auto industry, citing a significant drop in U.S. car exports to Canada and estimating that tariffs and trade disruptions have added $110 billion in costs over the past year and a half to North America’s auto sector. Ontario Premier Doug Ford condemned Trump’s tariff threat, calling him a bully and asserting that aggressive measures need to be taken in response.