Auto sector warns of 'devastating' impact of Trump tariffs on Canada and U.S.

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A 25-per-cent tariff on all foreign-made vehicles — and parts — is a recipe for economic ‘chaos’ on both sides of the border, Canadian auto industry and union officials said in condemning U.S. President Donald Trump’s plan.

While previously only threatened, Trump on Wednesday signed a presidential executive order that would see new tariffs in place as of April 2.

The American tariffs will range from 2.5 to 25 per cent, but there were no details given about how they’d be applied. And they’re in addition to the existing 25 per cent tariffs on steel and aluminum U.S. imports.

“President Trump fails to understand the chaos and damage this tariff will inflict on workers and consumers in both Canada and the United States,” said Unifor national president Lana Payne.

“It’s attack, followed by attack, followed by attack.

“We cannot expect our trade relationship with the U.S. to ever go back to the way it was, so we must forge a new economy that creates and supports Canadian jobs.”

Laval International president Jonathan Azzopardi said Trump’s actions are simply opening the door to low-cost countries supplanting North American firms in the automotive supply chain.

“I think with 100 per cent certainty the people who will end up winners in this won’t be living in Canada and the U.S.,” Azzopardi said. “The people that will win are the low-cost countries.

“As soon as you take away free trade agreements, that creates gaps and those guys will fill those gaps in the supply chain because this is all about price not quality.

“The U.S. will do this, and they won’t be able to undo it later on.”

Azzopardi added tariffs will quickly impact suppliers and there already has been some local layoffs because of the uncertainty.

“Tariffs aren’t the biggest issue, time is the biggest issue,” Azzopardi told the Star.

“If the tariffs are on for more than a few weeks or months, you will see plants shut down, customer relations damaged, people losing businesses and entire sectors being on shaky ground.”

The Canadian Vehicle Manufacturers’ Association (CVMA), which represents the interests of the Detroit 3 automakers, also condemned Trump’s tariffs as being destructive to the industry as a whole.

“U.S. tariffs on vehicles and parts will have immediate negative consequences for the highly-integrated North American automotive industry,” CVMA president Brian Kingston said in a statement.

“The result is higher costs for manufacturers, price increases for consumers and a less competitive industry. We continue to urge all parties that USMCA-compliant parts, components and vehicles be free of tariffs under that agreement.”

Industry analysts estimate the tariffs will add US$3,000 to US$12,000 to the price of a vehicle, depending on the model.

He’s playing with people’s lives

Windsor-Essex Regional Chamber of Commerce CEO Ryan Donally wonders, given how rushed and light on details the announcement was, if the tariffs are an attempt to distract the American media and public from the growing military intelligence leak scandal that has been hounding the Trump administration this week.

“I hope this isn’t a game with him because he’s playing with people’s lives,” Donally told the Star.

“He’s announced things before and backed off, so we’ll have to see next week. If he follows through, it would be devastating for this community.

“We have to take him seriously. He seems prepared to burn down his own industry, constituency and employment.”

Unifor Local 200 president John D’Agnolo, who is also chair of Unifor’s national auto council, pointed out that, if a 25 per cent tariff is fully imposed, the industry will shut down in a week.

“Trump is putting us in a position where you just can’t build a vehicle here,” D’Agnolo told the Star.

“The two Stellantis plants in Ontario would be hit immediately. It’ll be devastating for our people.”

He said for the two local Ford engine plants, which supply engines for F-series pickup trucks, the cost of a truckload of powerplants (111 engines) crossing the border would rise by $70,000 to $75,000.

And if all non-American parts are also getting tariffed on a permanent basis, as Trump claims they would, D’Agnolo said he doubts whether the Detroit automakers can survive.

“There are 1,200 parts in just an engine,” D’Agnolo said. “Ford can’t survive if that’s the case.

“Ford would have to call every supplier and ask if they can survive these tariffs. If not, they’d have to support them because they need those parts.

“You just can’t build a parts plant quickly and say, ‘Make these parts.’”

People advising him seem really ignorant of the industry

Ontario-based automakers like Toyota and Honda will also be slammed by the tariffs as they produce some of the most popular selling Japanese vehicles in North America.

Unifor Local 444 president James Stewart said Trump is misguided in where he’s looking for problems in the industry.

“We’re not the jurisdiction taking U.S. jobs,” said Stewart, who represents thousands of local autoworkers, including at Windsor Assembly Plant.

According to the U.S. Commerce Department’s International Trade Administration, the countries with the highest volume and auto import value in 2024 in U.S. dollars were: Mexico 2,961,598 vehicles ($78.5 billion); Japan 1,377,086 vehicles ($39.7 billion); South Korea 1,535,616 vehicles ($36.6 billion); Canada 1,065,465 vehicles ($31.2 billion); and Germany 446,566 vehicles ($24.8 billion).

Stewart said what’s also disturbing is the Trump administration’s lack of understanding about the North American auto industry.

“The people advising him seem really ignorant of the industry, still,” Stewart said. “There is no vehicle made of 100 per cent American parts.

“They don’t seem to understand, and they’re not interested in learning.”

Dwaddell@postmedia.com

Twitter.com/winstarwaddell