Trump threatens 50% tariffs on Canadian auto exports, prompting industry backlash
President Trump announced plans to raise tariffs on Canadian vehicles and parts to 50%, a move that Canadian officials and North American auto groups say would harm jobs and profitability on both sides of the border.
President Donald Trump announced that the United States could impose a 50% tariff on Canadian vehicle and parts exports beginning Jan. 1, a step that Canadian Prime Minister Mark Carney said would only be reconsidered if the United States adopts a more collaborative negotiating stance.
Canadian officials warned the measure would jeopardize assembly plants and parts suppliers, with Carney stating that Canada would return to the table only when the United States treats the partnership as equal.
Auto industry leaders in both countries urged a swift resolution. Flavio Volpe, chief executive of the Automotive Parts Manufacturers' Association, warned that a tariff on Canadian parts would halt U.S. vehicle assembly. > "A threatened U.S. tariff on Canadian auto parts will be paid by U.S. auto assembly," he posted on social media.
Unifor president Lana Payne described the proposal as an intimidation tactic that would hurt workers across the border, while Ontario Premier Doug Ford supported Carney’s decision to walk away from the deal.
The American Automotive Policy Council and the Pacific Manufacturing Association of Canada called for renewed negotiations to preserve North American auto competitiveness and to complete a review of the USMCA agreement. > "We urge U.S. and Canadian negotiators to reach a deal that enhances North American auto competitiveness," said Matt Blunt, council president.
Industry analysts note that the previous year’s tariffs reduced Canadian vehicle output by 15%, underscoring concerns that a further increase could exacerbate job losses at plants operated by Ford, GM, Honda, Toyota and Stellantis in Ontario.
Separately, Volkswagen CEO Oliver Blume faced employee dissent in Germany as he outlined a restructuring plan that could affect up to 50,000 jobs, though no final decisions on plant closures have been announced.