Members of Canada’s automotive sector are expressing a blend of frustration, confusion, and concern regarding U.S. President Donald Trump’s recent threats to potentially double certain tariffs on vehicles, automotive parts, and steel imported from Canada.
Following Canada’s rejection of a U.S. trade proposal late Friday, Trump announced on Truth Social Monday that tariffs could increase to 50 percent from their current levels, effective January 1, 2027.
Lucas Malinowski, the CEO of Global Automakers of Canada, stated that it is uncertain how serious industry stakeholders should interpret Trump’s remarks.
“We’ve encountered similar outbursts in the past that didn’t necessarily result in changes to tariff and trade policies. We’re monitoring the situation to see if any action will follow,” he conveyed to CBC News on Monday.
His organization represents several major foreign automakers, including Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
“Such a decision would be extremely worrisome for the Canadian automotive industry, but it would also be counterproductively disastrous for the American automotive sector,” Malinowski added.
‘We’ve been over this’: Volpe
Trump’s warning about increasing tariffs marks a further escalation in the ongoing trade conflict between Canada and the U.S. since negotiations stalled before the midnight deadline on Friday, which aimed to prevent 50 percent U.S. tariffs on approximately $28 billion worth of Canadian products.
On Saturday, Prime Minister Mark Carney vowed to reciprocate U.S. tariffs “dollar for dollar” after September 8, focusing Canada’s response on American steel, dairy products, appliances, agricultural machinery, pulp and paper, and electronics.
In his morning post on Monday, Trump criticized Canada, labeling it as “one of the worst nations in the world to deal with.”
“They feel entitled, yet WE DON’T NEED CANADA, THEY NEED US! They conduct 95% of their business with the U.S.,” Trump asserted.
Currently, finished vehicles and non-CUSMA-compliant auto parts brought into the U.S. from Canada are subjected to a 25 percent tariff, while Canadian steel faces tariffs ranging between 10 percent and 50 percent.
“On January 1, 2027, tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel will increase to 50%,” Trump mentioned on Truth Social at 9:38 a.m. ET. “Canada has been ripping off the United States of America for years.”
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified on Monday that the higher tariffs Trump is threatening would ultimately be borne by the U.S. auto industry, not Canadians.
“We’ve discussed this before. The ‘importer of record’ is responsible for paying the tariffs,” Volpe pointed out on X. “A proposed U.S. tariff on Canadian auto parts will be paid by U.S. auto assembly. Without those specific components, auto assembly across the U.S. would come to a standstill.”
Volpe also expressed his expectation that members of the U.S. automotive sector “will likely be contacting the White House today.”
Increased expenses for the entire automotive sector
Malinowski mentioned that the ongoing trade conflict has already negatively impacted business.
“Canada is the largest market for American-made cars, larger than the next three export markets combined,” he stated. “In terms of U.S. exports to Canada, they have decreased by 22 percent, equating to $7 billion over the past year.”
He estimates that tariffs and trade disruptions have collectively added $110 billion in expenses to North America’s automotive industry in the last year and a half.
Ontario Premier Doug Ford also commented on Trump’s latest tariff threat, telling CBC News that the U.S. president can “kiss my ass.”
“We need to throw everything at them, including the kitchen sink. He’s arrogant and cocky,” Ford remarked to CBC News.
“And that’s all Donald Trump is… a bully. Well, he’s going to have a rude awakening.”