Canada’s auto sector braces for ‘chaos and damage’ from Trump tariffs

Canadian industry groups have slammed Trump's latest set of tariffs, which will see a 25 per cent tariff imposed on foreign-made cars.

Industry groups in Canada are bracing for the “chaos and damage” they say will come from U.S. President Donald Trump’s 25 per cent tariffs on all vehicle imports, a move that could upend the highly integrated North American auto supply chain.

Trump announced the latest set of tariffs on Wednesday, signing an executive order that will see a 25 per cent tariff imposed on foreign-made cars and light trucks, in addition to tariffs already in place on those goods.

Brian Kingston, president and CEO of the Canadian Vehicles Manufacturing Association, said the move would have immediate consequences.

“U.S. tariffs on vehicles and parts will have immediate negative consequences for the highly integrated North American automotive industry. The result is higher costs for manufacturers, price increases for consumers, and a less competitive industry,” Kingston said in a statement.

Kingston urged the U.S. to consider exemptions for countries that are part of the Canada-U.S.-Mexico free trade agreement, which Americans refer to as the USMCA but is known as CUSMA in Canada.

“We continue to urge all parties that all USMCA-compliant parts, components, and vehicles be free of tariffs under that agreement,” he said.

“This is really starting to unwind what has been a very successful trade relationship between Canada, the U.S. and Mexico, especially in the automotive world.”

Darby added that the U.S. needs Canada and Mexico “because they cannot produce the parts and the components that they need.”