On Wednesday, Prime Minister Mark Carney’s election campaign had brought him to the bridge between Windsor, Ontario, and Detroit, over which $300 million worth of auto parts cross daily.
He unveiled a series of promises of programs for workers and auto-related industries that would be rolled out if President Trump imposed tariffs on products from the Canadian auto industry. Among them was a proposed fund of 2 billion Canadian dollars to reshape the industry for a future without the U.S. market.
The stakes are high. Cars and auto parts are the country’s second-biggest export by value and an employer, directly and indirectly, of about 500,000 people, accounting for 10 percent of manufacturing gross domestic product.
But what Mr. Carney, nor anyone else in the Canadian government, knew at that time was that a few hours later the program would no longer be something for an emergency situation.
Mr. Trump, without first informing Canada, announced that he was imposing 25 percent tariffs effective April 2 on all imports of cars and auto parts, with no exemption for Canada.
[Read: Trump Announces 25% Tariffs on Imported Cars and Car Parts]
[Read: With Car Tariffs, Trump Puts His Unorthodox Trade Theory to the Test]
[Read: Trump’s Punishing Tariffs Stun America’s Automaker Allies]
“This is a direct attack,” Mr. Carney told reporters at another campaign stop after the president’s announcement, adding that because of the tariffs, ties between Canada and the United States “are in the process of being broken.”
Mr. Carney then suspended campaigning to return to Ottawa for a cabinet meeting the next morning.
How to deal with Mr. Trump and his trade agenda were, of course, at the top of the list of issues when the election campaign began on Sunday.
Here’s how the three leading national parties are promising to deal with the future of the auto industry:
Liberals: Mr. Carney said his fund would “build an all-in-Canada auto manufacturing network.” He added: “On average, auto parts cross the border six times before final assembly. In a trade war, that’s a huge vulnerability.”
Conservatives: Pierre Poilievre, the Conservative leader, did not directly offer a plan for the auto sector but renewed his call for an end to the carbon tax on industries as well as expansion of Canada’s energy and natural resource sectors to revitalize the economy. “We have to become more self-reliant and have new and different markets,” he said this week.
New Democrats: Jagmeet Singh, the party’s leader, appeared in Windsor, his hometown, the day after Mr. Carney. He said that if auto companies based in the United States wanted to continue selling in Canada, he would require them to make vehicles in Canada or buy Canadian parts. He also said that he would use past government subsidies to block the removal of any machinery or tooling to the United States. “Those machines, those tools, that equipment — Canadians paid for them,” he said. “They belong to us.”
For an general assessment of the industry’s future, I spoke with Greig Mordue, the former general manager of Toyota Motor Manufacturing Canada. Mr. Mordue is now a professor of engineering at McMaster University in Hamilton, and his doctoral thesis was partly a history of automaking in Canada.
He said that the idea of an all-Canadian car industry had popped up every now and then since a government inquiry in 1960 promoted something it suggested be called the Beaver.
It doesn’t seem that any party is going that far, which may be just as well. Mr. Mordue said that “there’s really not enough volume to make a viable, profitable, sustainable Canadian automotive company.”
But he said that if Mr. Trump did enact his auto tariffs next week and if they were sustained, the result might be the opposite of what Mr. Carney hopes for the parts makers.
“The parts industry in Canada will be devastated, and it will be devastated quite rapidly,” he said.
Parts makers face two problems. The profit margin on parts is a fraction of the 25 percent tariff rate, so their operations will become deeply financially unsustainable.
At the same time, Mr. Mordue doesn’t expect that the automakers will immediately walk away from their multibillion-dollar assembly plants and their skilled and trained employees. Instead, he said, they are likely to try to buy as many parts as possible from the United States as a tariff solution. The Trump administration has indicated that the tariffs on cars assembled outside the United States will be lowered based on their American content.
But even if assembly plants stay open for now, Mr. Mordue sees a dim future for the industry should American tariffs be put in place and persist.
“If this goes through, nothing good happens for the Canadian automotive industry,” he said. “They will scramble, and they will find workarounds. But those workarounds will ultimately only delay the eventual withering of automotive manufacturing.”
As the week ended, Mr. Carney and Mr. Trump had their first telephone conversation. The president dropped his rhetoric about making Canada the 51st state, and the two leaders described their talk in positive tones. But Mr. Trump later said that his tariffs against Canada were “absolutely” coming on April 2.
[Read: Trump Tones Down His Rhetoric About Canada After Call With Its Leader]
Trans Canada
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After a 142 years in operation, Canada’s only rice mill finds itself squeezed from both sides in the trade war between Canada and the United States. Its future is now in jeopardy.
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Canadian airlines are eliminating tens of thousands of seats on flights to the United States this April as the Canadian boycott of all things American grows, Vjosa Isai and Christine Chung report.
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Agents of India’s government raised money and helped organize support in 2022 for Pierre Poilievre’s successful bid for the Conservative leadership, news outlets reported, citing intelligence officials.
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Four company-owned Tesla dealers claimed in government filings that they had sold an astonishing 8,653 cars in three days. Now, amid questions about the validity of the claims, Transport Canada has frozen the 43 million Canadian dollars in rebates they are claiming.
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In a guest essay for Opinion, author Glynnis MacNicol writes that “it’s been downright infuriating to see some Americans contemplating how Canada becoming the 51st state might be a good thing … for American Democrats.”
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If the skies are clear, some Canadians will see the most pronounced effect of a partial eclipse on Saturday.
Ian Austen reports on Canada for The Times based in Ottawa. He covers politics, culture and the people of Canada and has reported on the country for two decades. He can be reached at [email protected]. More about Ian Austen
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