Industry experts warn the threatened tariffs could devastate Canada’s auto sector while also disrupting U.S. production.
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Southwestern Ontario manufacturers reacted with surprise and disbelief to U.S. President Donald Trump’s threat to slap 50-per-cent tariffs on Canadian vehicles and auto parts, with one calling it “a nuclear option” that could decimate the region’s auto parts industry while also inflicting pain south of the border.
Trump said he planned to impose the new tariffs starting Jan. 1, a move that comes after trade negotiations between the U.S. and Canada broke down Friday, resulting in 50-per-cent levies now being applied on about $28-billion worth of Canadian goods, on top of sector-specific tariffs already applied to autos, steel and aluminum.
“On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump wrote on Truth Social. “Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer!
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“On Trade, and in other ways, also, they are among the worst Nations in the World to deal with.”
For his part, Prime Minister Mark Carney has said Canada will retaliate with dollar-for-dollar tariffs of its own beginning Sept. 8.
Industry watchers said the potential new tariffs would be devastating for Ontario’s auto belt, a key economic driver for the province that extends from Guelph, Cambridge and Woodstock in the east to Windsor in the west and includes four auto plants and dozens of parts makers along the Highway 401 corridor.
