Members of Canada’s automotive sector are reacting with a combination of frustration, uncertainty, and alarm to the recent threats made by U.S. President Donald Trump regarding the potential doubling of certain American tariffs on vehicles, trucks, auto components, and steel from Canada. Following Canada’s rejection of a U.S. trade proposal late last Friday, Trump announced on Truth Social that the tariffs could increase to 50 percent from their current levels starting on January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, expressed uncertainty regarding the seriousness of Trump’s statements. He mentioned that similar outbursts in the past did not always result in changes to tariff and trade policies. The industry group led by Malinowski represents major foreign automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s threat to raise tariffs is the latest development in the escalating trade tensions between Canada and the U.S. since negotiations collapsed before the midnight deadline on Friday to avoid significant U.S. tariffs on approximately $28 billion worth of Canadian goods. In response, Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” starting after September 8, focusing on various sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
In his recent statements, Trump criticized Canada, labeling it as “among the worst Nations in the World to deal with.” He emphasized that Canada heavily relies on the U.S. for business. Currently, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25 percent tariffs, while Canadian steel is subjected to tariffs ranging from 10 percent to 50 percent.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs threatened by Trump would be paid by the U.S. auto industry, not by Canadians. He highlighted that without these specific parts, auto assembly in the U.S. would come to a standstill.
The ongoing trade disputes have already impacted the industry, with Malinowski noting a decline in U.S. car exports to Canada by 22 percent and $7 billion over the past year. He estimated that the trade disruptions have added $110 billion in costs to North America’s auto sector over the last 18 months.
Ontario Premier Doug Ford also weighed in on Trump’s tariff threats, expressing strong disapproval and calling the U.S. president a bully. Ford emphasized the need to respond firmly to Trump’s actions and conveyed his confidence that Trump would face consequences for his behavior.