Members of Canada’s automotive sector are reacting with a blend of irritation, uncertainty, and apprehension to President Donald Trump’s recent warnings of potentially doubling certain American tariffs on vehicles, trucks, auto components, and steel from Canada. Following Canada’s rejection of a U.S. trade proposition late last Friday, Trump announced on Truth Social on Monday that the tariffs could surge to 50% from their current levels starting January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed difficulty in gauging the seriousness of Trump’s statement for stakeholders in his industry. He mentioned that similar outbursts in the past did not necessarily result in changes in tariff and trade policies, and they are observing to see if any actual modifications occur. The industry group he leads represents prominent international automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s proposed tariff increase is the latest development in the ongoing trade tensions between Canada and the U.S. since negotiations collapsed before the Friday deadline to avert 50% U.S. tariffs on approximately $28 billion worth of Canadian goods. Prime Minister Mark Carney pledged on Saturday to match American tariffs “dollar for dollar” effective September 8, focusing on U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in Canada’s retaliatory response.
In a subsequent social media post on Monday morning, Trump criticized Canada as being difficult to deal with, remarking that the country is “among the worst Nations in the World to deal with.” He emphasized a high dependency of Canada on the U.S. for its trade activities.
Currently, finished vehicles and non-CUSMA-compliant auto parts imported from Canada to the U.S. face 25% tariffs, while Canadian steel is subject to tariffs ranging from 10% to 50%. Trump reiterated his intention to increase tariffs on all cars, trucks, auto parts, and steel to 50% starting January 1, 2027, accusing Canada of benefiting at the expense of the U.S.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, clarified on Monday that the burden of the increased tariffs threatened by Trump would fall on the U.S. auto industry, not on Canadians. He emphasized that the importer of record is responsible for paying the tariffs, which in this case would be the U.S. auto assembly plants.
Malinowski highlighted the negative impact of the ongoing trade dispute on the industry, noting a significant decrease in U.S. exports to Canada and estimating that trade disruptions and tariffs have collectively added $110 billion in costs to North America’s automotive sector over the last year and a half.
Ontario Premier Doug Ford also weighed in on Trump’s tariff ultimatum, expressing defiance towards the U.S. president and asserting the need to retaliate strongly against his actions. Ford criticized Trump as a bully and predicted a harsh awakening for him.