Honda warns that a 50% tariff on Canadian auto parts would cripple industry
Honda senior vice president Jennifer Thomas said a proposed increase in U.S. tariffs on Canadian vehicles and parts could severely damage the North American automotive sector, urging a trilateral trade agreement.
Honda officials warned on Tuesday that a U.S. move to raise tariffs on Canadian vehicles and parts from 25% to 50% would have a severe impact on the automotive industry. The warning was issued by Jennifer Thomas, senior vice president of corporate affairs at American Honda Motor Co., during a Reuters automotive conference in Detroit.
"That really would be catastrophic for the entire industry," Thomas said.
Thomas said the United States, Canada and Mexico should reach a trilateral deal similar to the United States-Mexico-Canada Agreement (USMCA) rather than a bilateral arrangement. She added that Honda and other major U.S. automakers have been lobbying for a comprehensive accord and have opposed two-country deals.
The comments follow U.S. Trade Representative Jamieson Greer’s announcement that the USMCA will not be automatically extended, shifting the pact into an annual review process. President Donald Trump has threatened to implement the higher tariffs on Jan. 1 if a new deal is not reached.
Thomas expressed cautious optimism that renewed trade talks between the United States and Canada, including reduced levies on key materials such as aluminum, could prevent the tariff increase. She emphasized that maintaining a trilateral agreement is essential for the competitiveness of the U.S. automotive sector.
Honda, the second-largest vehicle producer in Canada after Toyota, noted that more than 60% of the cars it sells in the United States are built at its U.S. assembly plants. The company highlighted concerns that tariff uncertainty could disadvantage the North American region compared with overseas markets that enjoy lower rates.