A new round of U.S. tariffs has been imposed on Canada’s auto sector, escalating President Donald Trump’s global trade war. This move has caused significant disruptions, such as automaker Stellantis halting production at its Windsor, Ontario facility for two weeks. The primary reason cited for this decision is the imposition of tariffs by Trump. The new tariffs, which came into effect on Thursday, include a 25% levy on all foreign-made vehicles, trucks, and auto parts entering the United States. These tariffs follow previous measures taken by the U.S., such as a 25% tariff on all Canadian goods, as well as additional levies on steel, aluminum, and energy imports from Canada.
As a response, Prime Minister Mark Carney has denounced Trump’s auto tariffs as a “direct attack” on Canadian workers and has vowed to retaliate. Carney was forced to pause his election campaign for a second time in less than a week to coordinate a response to Trump’s announcement. He has held meetings with the Canada-U.S. business council, convened the federal cabinet committee on Canada-U.S. relations, and planned to virtually meet with Canadian premiers to discuss the situation. Carney stated that he would announce Canada’s response to the tariffs and additional duties in strategic sectors after these meetings.
Trump’s trade war, characterized by multiple rounds of tariffs on Canadian goods, energy, aluminum, and steel, has dominated the federal election campaign in Canada. All major federal parties have proposed countermeasures to push back against the U.S. trade actions and threats to exert “economic force” on Canada. The North American auto sector, already reeling from Trump’s previous metal tariffs, is concerned about the impact of these new tariffs on workers and the industry as a whole. The Global Automakers of Canada have warned that these tariffs will increase costs for consumers and affect workers on both sides of the border.
The White House claims that Trump is taking action to protect the American automobile industry, which it views as vital to national security and harmed by excessive imports. This justification is included in an executive order signed by Trump last week, stating that the auto tariffs will not apply to U.S.-made parts in foreign-made vehicles. Trump recently announced global reciprocal tariffs on several countries and territories, with a baseline 10% duty. However, Canada was not included in this list. The Liberal leader, Carney, continues to work towards finding a solution to the trade tensions caused by Trump’s actions, acknowledging the potential for a continent-wide recession if the auto industry is negatively impacted.
Lana Payne, national president of Unifor, expressed concern over the potential damage that Trump’s tariffs could cause to the North American auto industry. She emphasized the interconnected nature of the auto sector between Canada, the U.S., and Mexico, warning of the possibility of a continent-wide recession if the industry suffers. The ongoing trade war has led to uncertainty and instability in the auto sector, with companies like Stellantis being forced to halt production and workers facing potential job losses. The situation remains tense as both Canada and the U.S. grapple with the economic repercussions of escalating trade tensions.
