Honda warns 50% Canada auto tariffs would cripple industry
Honda officials say a proposed 50% tariff on Canadian vehicles and parts would severely damage North American auto manufacturing and could affect future plant investments.
Honda officials warned that a 50% tariff on cars, trucks and auto parts imported from Canada would have a devastating impact on the North American auto sector. The senior vice president of corporate affairs at American Honda Motor Co., Jennifer Thomas, told a Reuters automotive conference in Detroit that such a tariff "would be catastrophic for the entire industry" and emphasized the need for a trilateral agreement that includes Mexico, similar to the Canada-United States-Mexico Agreement (CUSMA).
President Donald Trump announced that the United States will raise tariffs on Canadian auto imports to 50% on Jan. 1, 2027 if a new trade deal is not reached by the end of the year. Thomas said the continuation of a trilateral pact is "integral to our success" and essential for U.S. competitiveness.
Honda executive vice president Noriya Kaihara previously indicated that the automaker is operating near full capacity in North America and is considering a new factory, but any expansion depends on the outcome of trade negotiations. "If there is no (CUSMA) agreement in the future, we may have to change our direction," Kaihara told reporters.
Honda is the second-largest vehicle producer in Canada, with annual output of about 400,000 units from its plants in Alliston, Ontario, where roughly 69% of Honda vehicles sold in Canada are built. The company said it remains committed to investing in the United States while exploring options for additional capacity.