Members of the Canadian auto industry are expressing a blend of frustration, confusion, and worry in response to U.S. President Donald Trump’s recent threats to double certain American tariffs on vehicles, auto parts, trucks, and steel from Canada. Following Canada’s rejection of a U.S. trade proposal, Trump announced via Truth Social on Monday that the tariffs would increase to 50% from their current levels by 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 changes to tariff and trade policies, and the industry is monitoring the situation closely. The group he leads represents major foreign automakers like Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s threat to escalate tariffs is the latest development in the Canada-U.S. trade conflict since negotiations collapsed before the deadline to avoid 50% U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney vowed to match American levies “dollar for dollar” after September 8, focusing on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in Canada’s response.
Trump criticized Canada on Monday, labeling it as “among the worst Nations in the World to deal with” and claiming that the country heavily relies on the U.S. for business. Currently, imported finished vehicles and non-CUSMA-compliant auto parts face 25% tariffs in the U.S., while Canadian steel is subjected to tariffs ranging from 10% to 50%.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs threatened by Trump would be paid by the U.S. auto industry, not Canadians. He emphasized that the importer of record bears the tariffs, and a tariff on Canadian auto parts would impact U.S. auto assembly significantly.
The ongoing trade war has already impacted the auto industry negatively, with Malinowski highlighting a significant decrease 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 criticized Trump’s tariff threats, describing him as a bully and emphasizing the need for a robust response to protect Canadian interests.