Members of Canada’s automotive industry are expressing a mix of frustration, confusion, and concern in response to U.S. President Donald Trump’s recent threats to double certain American tariffs on vehicles, auto parts, and steel imported from Canada. Following Canada’s rejection of a U.S. trade proposal, Trump announced on Monday via Truth Social that tariffs would increase to 50% from the current levels beginning on Jan. 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, stated that it is challenging for industry stakeholders to gauge the seriousness of Trump’s announcement. Malinowski emphasized that previous outbursts like this have not necessarily resulted in changes to tariff and trade policies, indicating a wait-and-see approach.
The industry group led by Malinowski represents major international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz. He highlighted that a tariff hike would be alarming for the Canadian auto sector and detrimental to the American auto industry as well.
Trump’s threat to increase tariffs marks the latest development in the Canada-U.S. trade conflict following failed negotiations before the recent deadline to prevent substantial U.S. tariffs on Canadian goods. Canadian Prime Minister Mark Carney vowed to retaliate in kind after Sept. 8, targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In his criticism of Canada, Trump labeled the country as “among the worst Nations in the World to deal with,” asserting that the U.S. is not reliant on Canada but vice versa. Currently, imported finished vehicles and non-CUSMA-compliant auto parts face 25% tariffs, while Canadian steel is subject to tariffs ranging from 10% to 50%.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs would be borne by the U.S. auto industry, not Canadians. Volpe explained that the importer of record is responsible for paying tariffs, indicating that U.S. auto assembly plants would bear the brunt of the higher tariffs.
Malinowski highlighted that the trade war has already negatively impacted the industry, with U.S. car exports to Canada declining by 22% and $7 billion over the past year. He estimated that tariffs and trade disruptions have added $110 billion in costs to North America’s auto sector in the last 18 months.
Ontario Premier Doug Ford criticized Trump’s tariff threats, describing the U.S. president as arrogant and a bully. Ford emphasized the need for a robust response to Trump’s actions, signaling a tough stance against the proposed tariff increases.