Auto sector warns of ‘devastating’ impact of tariffs to Canada, U.S.

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Canadian auto industry and union officials said in denounced U.S. President Donald Trump’s plan that a 25% tariff on all foreign-made vehicles and parts is the secret to economic “chaos”.

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Although previously only threatened, Trump signed a presidential executive order on Wednesday that will begin new tariffs on April 2.

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U.S. tariffs range from 2.5% to 25%, but no details on how to apply are provided. And, in addition to the existing tariffs on the 25% steel and aluminum import rates, they have also increased.

“President Trump failed to understand the chaos and damage such tariffs would cause to workers and consumers in Canada and the United States,” said Unifor state President Lana Payne.

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

“We can’t expect our trade relations with the United States to be back as it is, so we must build a new economy that creates and supports Canadian work.”

Laval International President Jonathan Azzopardi said Trump’s actions only open the door to low-cost countries to replace North American companies in the automotive supply chain.

“I think there is 100% certainty for those who will end up winning in Canada and the United States,” Azzopardi said. “The people who will win are low-cost countries.

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“Once you take the free trade agreement, there’s a gap that these people will fill these gaps in the supply chain because it all involves price rather than quality.

“The United States will do this, and they will not be able to undone it later.”

Azzopardi added that tariffs will soon affect suppliers and that due to uncertainty, there are already some local layoffs.

“Tariffs are not the biggest problem, time is the biggest problem,” Azzopardi told the Star.

“If the tariffs last for weeks or months, you’ll see plants closed, customer relationships damaged, lost businesses and the entire department on the shaky ground.”

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

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

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“The result is higher costs for manufacturers, higher prices for consumers and less competitive industries. We continue to urge all parties to comply with USMCA parts, components and vehicles, with no tariffs under this agreement.”

Industry analysts estimate that tariffs will increase to $3,000 to $12,000 based on the price of the vehicle.

He is playing with people’s lives

The miracle of Ryan Donally, CEO of the Windsor-Essex Regional Chamber of Commerce, given how hasty the details of the announcement are, if tariffs try to distract the U.S. media and the public from the troubled military intelligence leak scandal this week.

“I hope it’s not a game with him because he’s playing with people’s lives,” Donali told The Star.

“He announced things before and backed up so we have to see next week. If he follows, it will be devastating for this community.

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

Unifor Local 200 President John D’Agnolo, who is also the chairman of the Unifor National Automobile Commission, noted that the industry would close within a week if the 25% tariff was fully imposed.

“Trump puts us in a position where we can’t make cars here,” D’Agnolo told the Star.

“Two zodiac plants in Ontario will be hit immediately. This will be devastating for our people.”

He said the cost of trucks crossing the border (111 engines) will rise to $70,000 to $75,000 for two local Ford engine factories that provide engines for F-series pickup trucks.

D’Agnolo said that if all non-Americans were permanently levied, he doubted whether Detroit automakers could survive.

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“There are 1,200 parts in the engine alone,” D’Agnolo said. “If so, Ford wouldn’t be able to survive.

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

“You just can’t build the plants quickly and say ‘Make these parts.’”

People suggest he doesn’t seem to know the industry

Ontario-based automakers such as Toyota and Honda will also be under fire by tariffs as they make some of the most popular selling Japanese cars in North America.

Unifor Local 444 President James Stewart said Trump was misled in search of problems in the industry.

“We are not a jurisdiction,” Stewart said.

According to the U.S. Department of Commerce’s International Trade Administration, the countries with the highest value of USD and automatic imports in 2024 are: Mexico 2961,598 cars ($78.5 billion); Japan 1377,086 cars ($39.7 billion); South Korea 1535,616 cars ($36.6 billion); Canada 1065,465 cars ($31.2 billion); Germany 446,566 cars ($24.8 billion).

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Stewart said it was disturbing that the Trump administration lacked understanding of the North American auto industry.

“The person who advised him seems to know nothing about the industry,” Stewart said. “There is no vehicle made of 100% American parts.

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

dwaddell@postmedia.com

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