Members of the Canadian auto industry 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 vehicles, auto parts, and steel imported from Canada. Following Canada’s rejection of a U.S. trade proposal, Trump announced on Truth Social that the tariffs would increase to 50 percent from current levels starting January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, stated that it is challenging to gauge the seriousness of Trump’s statement. He mentioned that similar outbursts in the past did not necessarily result in changes to tariff and trade policies, and they are awaiting further developments.
The industry group led by Malinowski represents major foreign automakers in Canada, including Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz. Malinowski emphasized that a significant tariff hike would be worrisome for the Canadian auto sector and detrimental to the American auto industry.
Trump’s threat to raise tariffs marks the latest development in the ongoing Canada-U.S. trade conflict since negotiations collapsed before the recent deadline to avoid substantial U.S. tariffs on Canadian goods. Canadian Prime Minister Mark Carney pledged to match American tariffs “dollar for dollar” after September 8, focusing on various sectors like steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In a critical post on Monday, Trump criticized Canada, labeling it as “among the worst nations in the world to deal with.” He emphasized that the U.S. is vital to Canada’s economy, with the majority of their business conducted with the U.S. Currently, imported finished vehicles and non-CUSMA-compliant auto parts face 25 percent tariffs, while Canadian steel is subject to tariffs ranging from 10 percent 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. Volpe highlighted that the U.S. auto assembly would bear the cost of the increased tariffs on Canadian auto parts, potentially disrupting the auto industry across the U.S.
The ongoing trade war has already impacted business operations, according to Malinowski, who emphasized that Canada is the largest market for U.S.-made cars. He noted a significant decline in U.S. exports to Canada and estimated that tariffs and trade disruptions have added approximately $110 billion in costs over the past year and a half to North America’s auto industry.
Ontario Premier Doug Ford criticized Trump’s tariff threat, expressing strong disapproval and calling the U.S. president a bully. Ford emphasized the need to stand firm against such actions, characterizing Trump as arrogant and cocky, and predicting a challenging time ahead for the U.S. president.