Members of the Canadian automotive industry are expressing a mix of frustration, confusion, and concern in response to the new threats by U.S. President Donald Trump to double certain American tariffs on vehicles, auto parts, trucks, and steel imported 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 the current levels starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, stated that it is challenging for stakeholders in the industry to gauge the seriousness of Trump’s announcement. He mentioned that similar outbursts in the past did not always result in changes to tariff and trade policies, so they are waiting to see if this threat will materialize. The industry group led by Malinowski represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s threat to raise tariffs marks the latest escalation in the Canada-U.S. trade conflict since negotiations collapsed before the Friday deadline to prevent 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” after September 8, targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in Canada’s response.
In a social media post on Monday, Trump criticized Canada, calling it “among the worst Nations in the World to deal with” and emphasizing the U.S.’ economic importance to Canada. Currently, imported finished vehicles and non-CUSMA-compliant auto parts face 25 percent tariffs in the U.S., while Canadian steel is subject to tariffs ranging from 10 to 50 percent.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the higher tariffs threatened by Trump would be paid by the U.S. auto industry, not Canadians, as the “importer of record” covers the tariffs. Volpe highlighted that disruptions in the supply of Canadian auto parts would significantly impact U.S. auto assembly operations.
The ongoing trade dispute has already affected the automotive industry, with Malinowski noting a decrease in U.S. car exports to Canada by 22 percent and $7 billion over the past year. He estimated that tariffs and trade disruptions have added $110 billion in costs to the North American auto sector in the last eighteen months.
Ontario Premier Doug Ford criticized Trump’s tariff threat, calling him arrogant and a bully, and emphasized the need for a strong response. Ford stated that the U.S. president’s attitude would lead to a rude awakening.