Trump threatens to “permanently shut down” the Canadian car business with more tariffs
President Trump promised further tariffs on Canada and its auto industry on Tuesday.
After two months of tariff deadlines and delays, the big three US automakers are once again spinning out on potentially crippling levies.
President Trump’s tariff seesaw continued Tuesday with a fresh post on Truth Social, Trump’s social network.
The president wrote that he will “substantially increase” tariffs on cars coming into the US from Canada on April 2 if the country does not drop its 25% levy on electricity coming into the US along with unspecified “other egregious, long time tariffs.”
The additional tariffs on Canadian autos will “essentially, permanently shut down the automobile manufacturing business in Canada,” Trump wrote.
Shares of Stellantis, GM, and Ford began falling around the time of the post. The problem here is that there is not really any pure Canadian or American auto industry, but rather supply chains that span across borders, with parts being made, shaped, and assembled at different plants that are sometimes in either Canada or Mexico. The Trump administration hasn’t detailed how tariffs would be applied.
The US imported nearly $57 billion worth of passenger cars, trucks, buses, and vehicle parts from Canada last year.
While it may be true that the Canadian auto industry would be crippled by sustained tariffs on vehicle imports, US auto execs have warned that the pain wouldn’t exactly respect borders. Last year, more than one in five light vehicles sold in the US was imported from Canada or Mexico, according to S&P Global Mobility.
“Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the US industry that we’ve never seen,” Ford CEO Jim Farley said last month.
