These new tariffs are planed for Day 1 of the Trump administration on January 20th.
These tariffs would cause repercussions on both sides of the border.
Donald Trump‘s recent election in the United States is already causing repercussions north of the border. The new president-elect announced his intention to impose 25% tariffs on all imports from Canada and Mexico through an executive order, citing border security issues as the main reason behind the measure. The tariffs would take effect on day one (January 20th) of the new administration’s second term, an announcement that is stirring concern among senior auto industry executives at this time.
The Canadian automotive industry is strongly tied to the American market, as these figures reported by the Canadian Press. In 2023, the automotive industry was Canada’s second-largest export, with a value of over $51 billion. No less than 85% of vehicles assembled in Canada are sold south of the border.
On his personal account on the Truth Social network, Donald Trump indicated that these tariffs were necessary to combat drug trafficking and illegal immigration, and that his neighbors (Canada and Mexico) had to follow suit or face economic consequences.
In an article published on Automotive News, Flavio Volpe, President of the Canadian Automotive Parts Manufacturers’ Association, tried to calm things down by pointing out that Canada is an essential partner for the United States, especially in view of the emerging Chinese market. On the other hand, Volpe also pointed out that American consumers and industries depended on Canadian exports – notably aluminum from Quebec and fresh water from British Columbia – making the 25% tariffs “impractical”.
The Canadian government, via Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic Leblanc, confirmed that Ottawa would continue discussions with the next Republican administration and ensure the integrity of the Canada-U.S. border.
Ontario Premier Doug Ford, meanwhile, reiterated his concern about this announcement by the next U.S. administration, pointing out that his province’s economy is heavily dependent on the automotive industry, which accounts for 28.9% of exports.
The issue of tariffs anticipated by Mr. Trump’s administration is sure to continue to stir debate on both sides of the border, and of course within the automotive industry.
