Canada’s automotive sector stands at a critical juncture as recently implemented US tariffs threaten its sustainability, industry experts warn.
President Donald Trump’s trade policies targeting Canadian auto imports have prompted diverging responses from industry leaders. The 25% tariffs on imported vehicles took effect April 3, with additional tariffs on auto parts implemented May 3, despite partial relief measures announced in late April.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, advocates for a vocal resistance strategy, urging industry representatives to publicly discuss how these measures harm economies on both sides of the border. “Don’t shut up,” was the key takeaway from his recent presentation at the University of Windsor, where he encouraged stakeholders to speak directly to media about impacts previously considered taboo to discuss.
Meanwhile, some academics suggest more radical adaptation. Ian Lee, professor at Carleton University’s Sprott School of Business, points to Australia’s experience, noting that country successfully transitioned away from auto manufacturing three decades ago. “We’ve got to start preparing for the day when we possibly end the auto industry,” Lee told broadcaster CTV.
Volpe characterized such views as “surrendering before going into a type of war,” insisting that American manufacturers cannot afford to abandon Canadian production facilities.
The stakes are particularly high for Windsor-Essex, described by Nicole Vlanich, executive director of the Canadian Association of Moldmakers, as “the largest centralized hub of mold makers in the world.” Industry reports suggest Ontario could lose up to 68,000 jobs from the trade dispute.
Canada has maintained an “elbows up” approach in response, implementing dollar-for-dollar retaliatory tariffs. However, as Business Council of Alberta analyst Alicia Planincic notes, this strategy disproportionately impacts Canadians since US tariffs represent just 0.1% of their economy while Canadian countermeasures are ten times larger relative to Canada’s smaller economy.
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