Auto sector under threat as tariffs take effect while other sectors avoid new levies

While many Canadian exporters will be relieved to have dodged new U.S. tariffs on Wednesday, some of Canada’s biggest industries still face existential threats from border taxes.

U.S. President Donald Trump confirmed at a White House event Wednesday that imported vehicles would be subject to 25 per cent tariffs, which includes vehicles produced in Canada despite the existing free-trade deal.

Canada’s steel and aluminum industries are also still subject to 25 per cent tariffs, as are goods not compliant with the Canada-U.S.-Mexico agreement.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said on social media shortly after the Trump event that Canada avoiding reciprocal tariffs while still being subject to the others was like “dodging a bullet into the path of a tank.”

Importers of vehicles from Canada and Mexico will be able to apply to have the U.S. value of vehicle content excluded from the 25 per cent tariffs, but it’s still unclear how such a system might work.

Volpe and others have warned that the auto tariffs will lead to shutdowns and job losses across the highly integrated industry.