TORONTO – Canada’s auto sector and the economy at large has dodged the immediate threat of tariffs but significant risks remain.
The last-minute reprieve Monday afternoon before the U.S. was going to impose 25 per cent tariffs just means a continued overhang of uncertainty, said Unifor national president Lana Payne.
“Nobody should be breathing a sigh of relief,” she said in an interview.
“This is a 30-day pause on a much bigger plan that the president has with respect to tariffs, and with respect to all of the things that he expects that he can extract from Canada at the moment. And there will be a long list of them.”
Unifor has been dealing with the threat of tariffs since U.S. President Donald Trump said in November he planned to impose them. In that time Canada has lost out on investment and seen other decisions delayed while Unifor’s roughly 120,000 members in “trade-dependent” jobs live with the overhang of uncertainty, Payne said.
“The problem is the threat of the tariffs is still there and this is going to carry on, and it’s damaging to our economy. It’s damaging to investment in our country, and it’s damaging to Canadian workers.”
It’s important to go full-speed ahead with building a more resilient Canadian economy to create a bigger buffer from this kind of volatility, said Payne.
“I think we all recognize right now that the world has changed, and it’s certainly changed for Canada.”
While news of a reprieve was a relief, Canada’s federal and provincial governments need to use the time ahead to develop robust contingency plans, said Dennis Darby, head of the Canadian Manufacturers and Exporters.
“This temporary reprieve must not be squandered,” he said in a statement, calling on both plans for tariffs and to address long-standing structural issues.
Flavio Volpe, who sits on Trudeau’s Council on Canada-U.S. Relations and is also head of the Automotive Parts Manufacturers’ Association, said he drew confidence from how Canada approached the tariff threat.
“Constructive work with our colleagues to reduce the temperature and set up next discussions,” he said on a social media post after news of the reprieve broke.
He warned earlier in the day that the automotive industry would see shutdowns likely within a week or so if the tariffs go in place, given how interconnected the sector is.
“If he causes it to shut down, he’ll hear from Alabamians and Tennesseans and Michiganders and Ohioans. You don’t have to hear what people from Ontario think after that,” he said at an event in Woodbridge, Ont.
Payne said Saturday’s declaration that tariffs were coming, and Canada was retaliating, brought the news and the threat to a much wider audience.
“All of a sudden this becomes real to a lot of people in the United States, including a lot of businesses who weren’t really saying a lot, including a lot of industries, a lot of CEOs, a lot of corporate leaders who weren’t really saying a lot.”
She said Canada’s strong pushback made a difference, and the reaction of markets Monday also made a difference.
“My sense is that Canada needs to continue with the kind of resolve that it’s been highlighting, and we can’t relent one bit here.”
— With a file from Liam Casey in Woodbridge, Ont.
This report by The Canadian Press was first published Feb. 3, 2025.
