Today at 4 pm, just as markets closed, U.S. President Trump confirmed that 25-percent tariffs on imported vehicles will go into effect tonight at midnight. The announcement came at the start of his presentation outlining reciprocal tariffs on a host of countries around the world. It appears at this moment that Canada and Mexico are not among those countries; however, they will continue to be subject to the mixed bag of tariffs previously announced.
With regard to Canada, the president appeared to confirm a generalized 10 percent tariff on all products, but it’s not known how this will affect the automotive sector. The exemptions concerning the ACEUM agreement will remain in force.
What is clear at the time of writing is that the automotive industry is among the most affected sectors.
A reaction came swiftly from the Global Automakers of Canada (GAC):
“Tariffs are taxes that hurt consumers by increasing costs, driving up inflation, and unfairly impacting workers on both sides of the border.
At a time when automakers need certainty more than ever, we urge governments at all levels to consult with industry and think carefully about how to respond effectively to these unjustified tariffs, focusing on stability and maintaining competitiveness while minimizing unintended consequences.
Governments should look to long-term solutions to remove these tariffs, prioritizing the elimination of regulatory barriers to industry competitiveness and providing automakers with flexibilities to respond in these uncertain times.
- David Adams, President and CEO of GAC
Former Quebec Premier Jean Charest, now member of the Council on Canada-U.S. Relations, said on Radio-Canada’s TV network that Trump's announcements were “remarkably confusing”. He acknowledged that for the automotive industry, the tariffs would hurt. In his view, “the reaction of American markets is going to hurt Donald Trump. In fact, what's likely to hurt is the confusion; the markets are reacting very badly to that.”
More reactions will certainly follow in the coming hours and days. And who knows, maybe more clarity from the U.S. administration.