The threat of U.S. tariffs has been taken off the front burner for now, with negotiations going hard in the hopes an economic disaster can be averted in a month’s time. That disaster could impact tens if not hundreds of thousands of people on both sides of the border.
The automotive sector in particular is wait and see mode. Many automakers stand to be affected by any cross-border tariffs, and not just American ones. Honda, for one, makes cars on both sides of the border and would be significantly if parts and vehicles were hit by 25-percent tariffs every time they crossed the border.
For the moment, Honda says it’s making no immediate changes to the production schedule at its plant in Alliston, Ontario or to its planned $15 Billion investment in Ontario in the wake of the U.S. threat to impose tariffs.
“While we work to understand the impact that tariffs could have on our activities, we will take no immediate measures to change our current operations or our electrification plans in Canada,” explained Honda Canada spokesperson Ken Chiu in an email dated February 2nd, before the announcement that the tariffs had been postponed.
Honda is the second-largest producer by volume of vehicles in Canada; it assembles the CR-V and Civic models here, and it also builds 2.0L 4-cylnder engines for the Civics built locally and the Honda plant in Greensburg, Indiana.
Border tariffs could well bring a brutal halt to car production in North America. And if Canada imposes retaliatory tariffs on products coming from the U.S., that will affect models produced by Honda at its plant in Ohio.
Honda built 420,550 vehicles at the Alliston facility in 2024, according to data provided by the Automotive News Research & Data Center in Detroit. Nearly 80 percent of those vehicles were exported to the U.S.
Regarding that $15 billion in electrification investments earmarked for EV production in Ontario, the automaker said in January that a delay on that front was being considered, in the event of anti-electrification policies enacted in Washington by the incoming administration.
No one knows for now how the industry will respond, either to a new free-trade deal that takes tariffs off the table, or to a worst-case scenario in which tit-for-tat tariffs are implemented in North America. We’re on new ground here.