Automotive sector raises alarm over expected damage from tariffs

With Canada, U.S. and Mexico in a full-blown trade war, the North American auto industry is among industries bracing for significant damage, president and CEO o

OSHAWA, ONT. AND TORONTO — Workers and companies in the automotive sector are bracing for the massive disruptions expected after U.S. President Donald Trump went ahead with his long-threatened tariffs on Canadian and Mexican goods.

The 25 per cent tariffs on Canadian exports to the U.S. will mean a sharp rise in costs for automakers, especially since parts often cross the border several times as part of the deeply integrated industry.

The cost and logistics pressure are expected to mean rising costs for consumers and lost jobs for the industry.

“After months of taunts and threats that have already hurt investment decisions and jobs in Canada, Trump has fired the first shot in a full-on trade war,” Unifor president Lana Payne said in a statement.

“These tariffs will hurt working people with higher prices for everyday goods, destroy jobs on both sides of the border and have devastating consequences for highly integrated manufacturing sectors, including auto, across Canada and the U.S.”

Payne said it was time for all Canadians to fight back and for the country to redefine its international trade relationships.

Jeff Gray, president of Unifor Local 222 in Oshawa that represents GM workers there, said while the impact of tariffs is still not clear, members are worried about their future.

“We are all uneasy right now. We have been through a great deal in Oshawa,” he said, referring to past layoffs. “We feel like we have seen it all, until now, we are into this tariff situation right now which could lead to the biggest industrial crisis we have ever experienced.”

David Adams, president of Global Automakers of Canada, said the longer tariffs stay in place, the greater the threat of permanent and significant damage to the North American auto sector.

“If they do go on for any length of time, then yeah, you could be talking about a fundamental restructuring of the automotive industry in North America,” he said.

Adams, who represents Honda, Toyota and others, said it was speculative at this point, but that effects of tariffs could show up fairly quickly. He said he hopes the effects on the stock market and pressure from U.S. businesses and politicians, could help reverse Trump’s tariff decision.

Ford Motor Co. chief executive James Farley said in February that long-term tariffs on Canada and Mexico would “blow a hole in the U.S. industry that we have never seen.”

He said the North American industry is in a global street fight as it deals with electrification and the emergence of the Chinese as a global force in the auto industry. He said Trump has talked about making the U.S. industry stronger, but so far what Farley is seeing is “a lot of cost and a lot of chaos.”

The Canadian Vehicle Manufacturers' Association, which represents Ford as well as GM and Stellantis, said the tariffs will undo over 60 years of integration to create a globally competitive industry.

“U.S. tariffs implemented today will do significant damage to the highly integrated automotive industry,” CEO Brian Kingston said in a statement.

Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, has been warning for weeks that tariffs will likely lead to shutdowns within a week or so, on both sides of the border.

It’s something Gray in Oshawa is also worried about given how closely tied the industry is across borders.

“If the supply chain is going down, that is going to affect every assembly plant.”

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Sharif Hassan and Ian Bickis, The Canadian Press

This report by The Canadian Press was first published March 4, 2025.