Incoming U.S. president Donald Trump has threatened to put a 25-per-cent tariff on all Canadian and Mexican imports. The policy would do major damage to the auto manufacturing industry in communities including Alliston, Ont., where Honda CRV cars are produced, as well as other major Canadian industries.Donald Trump has fired the opening shots in a trade war that could do significant damage to Canadian businesses and consumers and reframe Canada-U.S. economic relations for the next four years.
“Even if this 25 per cent punitive tariff doesn’t happen, this won’t be the last set of negotiations over trade and tariffs with the new White House team,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a note to clients. “We must do everything in our power to protect and preserve this energy partnership,” Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, said in a statement. “A 25 per cent tariff on oil and natural gas would likely result in lower production in Canada and higher gasoline and energy costs to American consumers while threatening North American energy security.”
Jean Simard, CEO of the Aluminium Association of Canada, noted that the U.S. produces about 800,000 tonnes of primary aluminum a year, but it consumes between five and six million tonnes. The North American auto sector is particularly integrated, with vehicles and components crossing borders several times before final assembly and delivery to a dealer’s lot. About 55 per cent of vehicles sold in the United States in 2023 were assembled there, while 15 per cent came from Mexico and 7 or 8 per cent from Canada, according to Ward’s Automotive and Bank of Montreal research.