Members of the Canadian auto industry are reacting with a mixture of annoyance, uncertainty, and worry in response to the recent threats made by U.S. President Donald Trump 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 took to social media platform Truth Social to announce that the tariffs would increase to 50% 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 statement. He mentioned that similar outbursts in the past did not always result in actual changes to tariff and trade policies, and they are waiting to see if this threat materializes. The industry group he leads represents major foreign automakers such as Toyota, Volkswagen, BMW, Honda, Hyundai, Nissan, and Mercedes-Benz.
Trump’s latest tariff threat is seen as a further escalation in the ongoing trade tensions between Canada and the U.S. since negotiations faltered before the deadline to avoid substantial U.S. tariffs on Canadian goods. In response, Prime Minister Mark Carney vowed to match American tariffs “dollar for dollar” effective September 8, targeting U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
Trump criticized Canada in a social media post, calling the country “among the worst Nations in the World to deal with,” and emphasizing the trade imbalance. Currently, imported finished vehicles and non-CUSMA-compliant auto parts from Canada face 25% tariffs, while Canadian steel is subject to tariffs ranging from 10% to 50%.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, clarified that the increased tariffs threatened by Trump would be borne by the U.S. auto industry, not by Canadians. He emphasized that U.S. auto assembly plants would be the ones paying the higher tariffs, as they are the importers of record for the parts. Volpe anticipates that representatives from the U.S. auto industry will be in communication with the White House regarding this issue.
The ongoing trade dispute has already had a negative impact on the auto business, with Malinowski highlighting a significant decline in U.S. car exports to Canada. He estimated that tariffs and trade disruptions have added approximately $110 billion in costs to the North American auto industry over the past 18 months.
Ontario Premier Doug Ford condemned Trump’s tariff threats, labeling the U.S. president as arrogant and stating that aggressive measures need to be taken in response. Ford characterized Trump as a bully and predicted that he would face consequences for his actions.