{"id":15298,"date":"2025-02-06T14:30:29","date_gmt":"2025-02-06T14:30:29","guid":{"rendered":"http:\/\/torontotribune.ca\/index.php\/2025\/02\/06\/auto-sector-faces-uncertainty-instability-chaos-amid-trump-tariff-pause\/"},"modified":"2025-02-06T14:30:29","modified_gmt":"2025-02-06T14:30:29","slug":"auto-sector-faces-uncertainty-instability-chaos-amid-trump-tariff-pause","status":"publish","type":"post","link":"https:\/\/torontotribune.ca\/index.php\/2025\/02\/06\/auto-sector-faces-uncertainty-instability-chaos-amid-trump-tariff-pause\/","title":{"rendered":"Auto sector faces \u2018uncertainty, instability, chaos\u2019 amid Trump tariff pause"},"content":{"rendered":"


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As Canada scrambles to avoid tariffs from U.S. President Donald Trump amid a month-long pause, union leaders say there is growing uncertainty in the auto manufacturing<\/a> sector \u2014 an industry that could be forced to shut down within mere days if those tariffs are implemented.<\/p>\n

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That\u2019s because the North American auto sector is highly integrated, with parts and components frequently crossing the Canada-U.S. border alone before vehicles are fully assembled.<\/p>\n

A 25 per cent tariff<\/a> on Canadian auto parts would upend that international assembly line, manufacturers say.<\/p>\n

\u201cUncertainty, instability, chaos: those are the words I\u2019ve been using to describe the moment we\u2019re in,\u201d said Lana Payne, the national president of Unifor, whose members include nearly 22,000 Canadian autoworkers.<\/p>\n

\u201cIn the auto industry alone, you would see a mass industrial interruption unlike [anything] I\u2019ve seen in my lifetime. It potentially would shut the industry down in a week at least.\u201d<\/p>\n

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The Canadian Vehicle Manufacturers Association (CVMA), which represents automakers Ford, General Motors and Stellantis, says parts and components can cross the U.S. borders with Canada and Mexico up to eight times before final vehicle assembly.<\/p>\n

That highly integrated regional production model, which dates back decades, has been replicated with success by other auto manufacturing countries like Japan and South Korea, which employ southeast Asian countries to produce parts and supply critical minerals for batteries.<\/p>\n

Yet American unions like United Auto Workers have criticized the regional approach,<\/a> claiming North American free trade rules have allowed automakers to invest more in Canada and Mexico while hollowing out the U.S. auto sector.<\/p>\n

Trump has vowed to bring those jobs back to the U.S. \u2014 a point frequently raised by Ontario Progressive Conservative Party Leader Doug Ford, who is running for re-election as premier on the promise to protect an industry that employs as many as 100,000 workers in the province alone.<\/p>\n

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\u201cThe threat of tariffs is still very real,\u201d Ford said at a campaign stop in Ottawa on Tuesday.<\/p>\n

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\u201cTrump is on a mission. He wants to take Ontario\u2019s auto jobs and send them to Michigan and North Carolina.\u201d<\/p>\n

Auto exports account for nearly 30 per cent of Ontario\u2019s foreign trade output, according to the CVMA. It also notes over 90 per cent of vehicles made in Canada are exported to the U.S., at a value of $51 billion in 2023.<\/p>\n

The federal government says auto exports account for 10 per cent of manufacturing GDP and 21 per cent of manufacturing trade.<\/p>\n

Trump has said repeatedly in recent weeks that \u201cwe don\u2019t need\u201d Canada\u2019s vehicles or auto parts, and that he wants vehicles purchased in America to be built entirely domestically.<\/p>\n

That\u2019s not currently possible, Payne says.<\/p>\n

\u201cAbout 50 per cent of the parts that go into cars built in the United States come from Canada and Mexico,\u201d she said. \u201cAnd if you don\u2019t have parts, you can\u2019t build cars.<\/p>\n

\u201cA lot of these parts companies would not be able to withstand a 25 per cent tariff. It would just make it impossible for them to operate.\u201d<\/p>\n

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Manufacturers and unions have also pointed out that tariffing North American auto parts will ultimately raise the cost of vehicle production and the sale prices of vehicles sold within the region.<\/p>\n