Carney government warned by auto industry that delaying tariff talks puts thousands of jobs at risk

Lana Payne, head of Unifor, the largest private sector union that speaks for hundreds of thousands of auto, aluminum, and forestry workers, said in an interview Trump’s punishing tariffs on steel, aluminum, autos, copper and forestry are “strategic, surgical and designed to destroy Canada’s industrial economy.”

She said the Carney government should not give into any temptation to cut early side deals with Trump on some tariffs while postponing other talks on autos and forestry, she said. 

“I think there’s a sense that they’re sending a message that if they can’t get a deal on auto now, that there’s this other place where we could talk about it. And what I’m saying is, waiting for the CUSMA deal is a problem with the tariffs that we’re suffering under. I mean, how long to negotiate that? The risk is you may not get to negotiate it.”

Payne said she told the prime minister last week after Stellantis announced the end of its Jeep production plan for Brampton, leaving 3,000 Canadian workers in the lurch, that waiting for the CUSMA “review or renegotiation, or whatever it is they’re calling it” carries a “very big risk. We might not be able to get a deal there. We might be in a situation where the U.S. cancels that deal and that sets the clock ticking.” 

The CUSMA deal is the Canada-U.S.-Mexico trade pact that Trump signed in 2018, which contains a provision for a review to be completed by July 2026. To be renewed for its full term, the deal’s extension to 2036 must be confirmed by all three countries. Trump has already said he is indifferent about it, and could be happy with bilateral deals in its stead.

Meanwhile, Trump continues to levy tariffs, the latest on heavy trucks and buses. “It’s relentless,” said Payne, “and it is designed to weaken us, to condition us into taking a very bad trade deal and to continue to increase their own leverage over Canada.”

Canadian leaders in all the tariff-hit sectors are trying to parse very little information that is coming from Prime Minister Mark Carney and his team, and Payne said she is equally worried about delayed resolution of lumber tariffs, which are hurting hundreds of sawmills and communities across Canada.

Kirsten Hillman, the Canadian ambassador in Washington who is leading talks with Canada-U.S. Trade Minister Dominic LeBlanc, has set up consultation tables with steel, aluminum and auto sectors, and Payne said she sits on the latter two, but the information flow is mainly to the government, and many are frustrated it’s not more of a two-way street.

“We’re in an economic war,” said Payne. “We need an economic war room, and I think that this is the frustration that you may be hearing from, from industry and others, is the sense of, OK, what are we doing at these tables, and where is the deal?” 

On Tuesday, Carney and LeBlanc downplayed the prospect of an imminent agreement on steel and aluminum tariffs, despite a Globe and Mail report one is ready. LeBlanc said it is “overly optimistic” to suggest anything was close, while the prime minister told reporters “I wouldn’t overplay” the notion that a deal is set to be signed on the sidelines of the Asia-Pacific summit in Korea next week.

“We can improve our trade relations in the steel, aluminum and energy sector [and] we hope in autos and softwood lumber. We’re in intense negotiations at the moment. I will see the U.S. president at APEC in Korea. It’s possible, but we’ll see, we’ll see,” Carney said in French.

A senior government official, speaking on background, said there’s no deal until there is a deal. Several other government officials refused to answer questions about what is happening with auto sector talks.

Flavio Volpe, head of the Auto Parts Manufacturers Association, said he understands the “potential appeal” of Ottawa wanting to expedite talks to relieve the 50-per-cent tariffs on steel and aluminum first and, as a Plan B, hold off on auto negotiations for later. But Volpe also warned that delays talks into July, and “even then the U.S. president could also walk away from that.”

“So there’s a risk in how long it could take. And there’s no guarantee that the Americans would stay in” the trilateral agreement at all, he said.

As Trump’s tariffs bite Canadian shipments, and the U.S. backs away from any support of electric vehicle sales, investment is beginning to flow southward, said Volpe.

“The dominoes are falling,” he said, pointing to Stellantis’ decision to pull out of the plan to build the new version of its Jeep Compass in Brampton and shifting production to Illinois, and GM’s decision to shut down its electric van line in Ingersoll, putting more than 1,100 workers on layoff notice.

“We only have nine plants,” said Volpe, and with now two of those ditching production plans, other companies are vulnerable. “As companies make, in some cases, cowardly decisions, they also advantage themselves against their competitors: it puts more pressure other companies like Ford,” he said. “If they were all standing, they can all push back, but now two of them said, ‘meh.’

“How long are we going to wait before we realize there’s nothing left to stand up?”

Linda Hasenfratz, chief executive of Linamar Corporation, one of Canada’s largest auto parts manufacturers, delivered a similar message in Ottawa a day earlier, telling MPs that resolving the metal and auto tariffs has to be the government’s “absolute priority.”

“We can’t wait six, eight, nine months to get the tariffs on vehicles, metal and metal derivative products, importantly, dealt with. They’re creating an enormous amount of cost for U.S. businesses and U.S. consumers, but also for Canadian companies.”

Hasenfratz sounded a more positive note, however, about Canada’s ability to withstand Trump’s economic blows over a long term. “Globalization is only dead in the U.S.,” she said. “The rest of us have the opportunity to trade where and wherever we want, and we have a huge opportunity in Canada, with the agreements we already have in place to lever that.”