OTTAWA — U.S. President Donald Trump said he is slapping a 25 per cent tariff on all autos not made in America.
Speaking Wednesday from the Oval Office, Trump said the new import duties are separate from other global so-called “reciprocal” tariffs that he will also impose on April 2 on America’s allies in retaliation for what Trump claims are unfair trade practices.
“I look forward to it,” Trump said, calling next Wednesday “liberation day” for America.
The latest punitive measure on foreign cars entering America comes on top of 25 per cent steel and aluminum tariffs Trump imposed on March 12 that hit Canadian and Mexican shipments headed stateside.
Trump claims the auto surcharges will drive carmakers and investors to produce vehicles on American soil — a prospect most industry analysts say will take years to achieve.
“If they’re made in the United States,” Trump said, there is “absolutely no tariff. We start off with a two and a half per cent base, which is what we were at, and we go to 25 per cent.”
“Before I was elected, we were losing all of our plants and were being built in Mexico and Canada and other places. Now those plants largely have stopped and they’re moving them to our country,” Trump said.
“A lot of foreign car companies, a lot of companies, are going to be in great shape because they’ve already built that plant (in America), but their plants are underutilized so they’ll be able to expand them inexpensively and quickly,” he added.
Earlier this month, the president had delayed the sectoral auto tariffs after intense lobbying by the Big Three American automakers, GM, Ford and Stellantis.
Stock markets like the S&P 500 index dipped Wednesday ahead of the announcement, after White House spokesperson Karoline Leavitt said the auto tariff announcement was imminent.
Automakers and analysts have warned the tariff announcement would have a huge impact.
S&P Global Mobility, in a Mar. 12 report, said auto tariffs could mean a potential drop in North American production by “up 20,000 units per day within a week.”
“While there is a Trump administration trade agenda, a structured plan is questionable. The U.S. seeks access to Canada’s considerable mineral, power and water resources while aiming to curb mainland Chinese investment in Mexico,” the report said. It suggested that producers may well “reaffirm” their commitment to U.S. manufacturing, and possibly shift production from Mexico and Canada, but it said some of those announcements will include “previously decided, but unannounced, investment plans.”
Whether Trump will be persuaded to grant any other delays or exemptions is unclear.
Earlier this month, Trump had also delayed 25 per cent broad-based tariffs on Canada and Mexico (and a lesser 10 per cent duty on oil, gas, and potash) that he threatens in connection with his purported border security concerns about fentanyl and migrants.
But that reprieve only applied to Canadian or Mexican products that comply with the continental free trade pact known as the Canada-United States-Mexico Agreement, and its rules of origin. It is set to expire on April 2.
Canada has argued that Trump’s tariffs would be a violation of CUSMA, which Trump signed in 2018. That pact allows tariff-free trade, for example, of cars that contain 70 per cent North American steel and aluminum, and cars that are substantially produced — 40 per cent of their value — by workers at plants where the average hourly wage was at least $16 (US).
Liberal Leader Mark Carney proposed a new $2 billion “strategic response” fund to help Trump-proof Canada’s auto industry, speaking in the border automaking city of Windsor earlier Wednesday.
“Autos are our number-two export in this country. It is a sector that supports 125,000 jobs directly, and almost another 500,000 jobs in related industries, many of them good union jobs,” said Carney, pledging that any counter-tariff revenue would go toward helping workers and companies, not to tax cuts.
The fund Carney announced Wednesday is intended to build up a more Canadian-centered supply chain, from raw materials to finished vehicles, that is less reliant on integration with the U.S., according to a Liberal party backgrounder.
In addition, Carney said he plans to boost the auto parts manufacturing sector to limit the number of times parts cross the Canada-U.S. border during production, will boost the Canadian steel, aluminum and critical minerals sectors, and will institute a buy-Canadian policy for government purchases of automotive vehicles, including dual-use and military vehicles.
Conservative Leader Pierre Poilievre on Wednesday continued to question Carney’s ability to stand up to Trump, telling a Quebec City news conference the Liberal leader is “too weak and fragile” to confront the president.
”As for President Trump, my message to him again is, knock it off,” Poilievre said ahead of the auto tariff announcement. “These tariffs are simply causing chaos in markets. They’re dislocating workers on both sides of the border. Stop threatening Canada with tariffs. Stop talking about our sovereignty.
“We are two countries, have been two wonderful friends over centuries. It is better to build on that Canada-U.S. friendship as two separate and sovereign countries. And if the president does hit us with more tariffs, we will retaliate. But more than that, we have to reverse the weakness that the Liberals have caused in our economy.”
