Canadian auto industry members are expressing a mix of frustration, confusion, and concern in response to U.S. President Donald Trump’s latest threats to double certain American tariffs on cars, trucks, auto parts, and steel from Canada.
Following Canada’s rejection of a U.S. trade proposal on Friday, Trump announced on Truth Social that the tariffs would increase to 50 percent from current levels starting January 1, 2027.
Lucas Malinowski, CEO of Global Automakers of Canada, stated that it is challenging to gauge the seriousness of Trump’s statement.
He mentioned, “We have observed similar outbursts in the past that did not result in tariff and trade policy changes. We are waiting to see if this threat materializes,” during an interview with CBC News on Monday.
The industry group he leads represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Malinowski expressed concern, stating, “Such a move would be alarming for the Canadian auto sector and detrimental to the American auto industry as well.”
‘We’ve been over this’: Volpe
Trump’s tariff increase threat is the latest development in the Canada-U.S. trade conflict since negotiations failed before the Friday 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” following September 8. Carney highlighted that Canada’s response will target U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In a social media post on Monday morning, Trump criticized Canada, describing it as “one of the worst Nations in the World to deal with.”
He added, “They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US! They conduct 95% of their business with the U.S.”
Currently, finished vehicles and non-CUSMA-compliant auto parts imported from Canada to the U.S. are subject to 25 percent tariffs. Canadian steel faces tariffs ranging from 10 percent to 50 percent.
Trump announced, “On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” emphasizing that Canada has been taking advantage of the U.S. for years.
Flavio Volpe, president of the Automotive Parts Manufactures’ Association, clarified that the U.S. auto industry, not Canadians, would bear the brunt of the higher tariffs threatened by Trump.
He explained, “We’ve discussed this before. The ‘importer of record’ pays the tariffs,” and added, “A potential U.S. tariff on Canadian auto parts will be absorbed by U.S. auto assembly. Without these specific parts, auto production across the U.S. would cease.”
Volpe anticipated that members of the U.S. auto industry would engage with the White House promptly.
Additional Expenses for the Entire Auto Industry
Malinowski highlighted that the ongoing trade dispute has already impacted business operations negatively.
He emphasized, “Canada is the primary market for U.S.-manufactured cars, surpassing the combined value of the next three export markets.” He noted a 22 percent decline, equivalent to $7 billion, in U.S. exports to Canada over the last year.
Malinowski estimated that tariffs and trade disruptions have added $110 billion in costs to North America’s auto industry in the past 18 months.
Ontario Premier Doug Ford also commented on Trump’s recent tariff warning, stating to CBC News that the U.S. president can “kiss my ass.” Ford criticized Trump, calling him arrogant and a bully, and emphasized that the U.S. would face consequences for such actions.