Latest news with #AutoPact
Calgary Herald
14-05-2025
- Business
- Calgary Herald
Trump keeps saying the U.S. doesn't need Canada's stuff. We asked experts if he's right
This advertisement has not loaded yet, but your article continues below. U.S. President Donald Trump speaks during an event in the Roosevelt Room at the White House in Washington, D.C. Photo by Mark Schiefelbein/The Canadian Press files In his Oval Office meeting with Prime Minister Mark Carney last Tuesday, President Donald Trump repeated his refrain that the U.S. doesn't need or want anything Canada produces, listing off a litany of goods he said his country would rather make itself. But can the U.S. really do without our stuff? THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Calgary Herald ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Calgary Herald ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors We checked with economists and industry experts to see just how much the U.S. relies on eight of our biggest exports, and whether Trump is right in thinking they can go it alone. Your weekday lunchtime roundup of curated links, news highlights, analysis and features. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again Trump made it clear during his meeting with Carney that the U.S. does not want Canadian-made vehicles. 'We want to make our own cars, we don't really want cars from Canada,' said Trump. 'At a certain point, it won't make economic sense for Canada to build those cars.' But North America's car industry is one of the most integrated in the world, originating with the Auto Pact that was signed by the U.S. and Canada in 1965. In 2024, Canada sent nearly 1.1 million vehicles to the U.S. and the U.S. exported nearly 630,000 vehicles to Canada, according to the Bank of Montreal. Charles Bernard, lead economist at the Canadian Automobile Dealers Association, said it will take billions of dollars in investment and 15 to 20 years for the American auto industry to replace the supply of vehicles it imports from Canada and Mexico. 'The tariff effects are certainly going to be negative for these companies, but moving back production would be even more costly,' said Bernard. 'He (Trump) paints a great image for the Americans about an industry that kind of made the nation and bringing it back, but there are structural elements that don't make it a possibility.' However, Bernard said Canada should be concerned about future investments in the industry if the country is no longer seen as having reliable tariff-free access to the U.S. market. Like automobiles, auto parts were supposed to be subject to a 25 per cent tariff, but the White House confirmed on May 1 that Canadian parts made in compliance with the Canada – United States – Mexico Agreement (CUSMA) would be exempted. Bernard said this decision was made following pressure from the U.S. auto companies that warned the tariffs on auto parts would lead to higher production costs and higher prices for vehicles. 'The industrial tissue that links these three countries, you can't necessarily break them and recreate it in America right away,' said Bernard. 'Not only will it have a direct impact on your ability to produce cars, but the cost would be extremely high.' According to the Canadian Chamber of Commerce Business Lab, Canada and Mexico account for 58 per cent of U.S. auto parts imports. It is also estimated that car parts cross the Canada – U.S. border six times on average before final assembly. This advertisement has not loaded yet. This advertisement has not loaded yet, but your article continues below. 'You can't recreate that same optimization in four years,' said Bernard. 'You would need to readjust your supply, there would be suppliers in Canada that they wouldn't find in the U.S., because they don't have the expertise.' Trump has said the U.S. does not need Canadian lumber and, on March 1, he signed an executive order to accelerate U.S. domestic production of timber, lumber, paper and other forest products by deregulating logging on federal lands. The Canada – U.S. softwood lumber dispute goes back decades, with combined countervailing and anti-dumping duties on Canadian lumber currently sitting at just over 14 per cent. These levies are expected to go up to 34 per cent this fall. Trump has threatened to impose additional tariffs on top of the duties already in place but so far has not done so. This is because the U.S. relies heavily on Canadian lumber and paper pulp products. Canada supplies 24 per cent of the U.S.'s softwood lumber, which will be hard to replace. Ian Dunn, president and chief executive of the Ontario Forest Industries Association, said it would take five to 10 years for the U.S. to replace the Canadian market share. 'They would have to build new capacity, and they would have to build new mills,' said Dunn. 'A lot of mills in the U.S. south and pacific northwest, have shut down or curtailed in the last 16 to 18 months.' Canada is also a large source of paper pulp, a key input for thousands of different products including paper towels and toilet paper. Canada produces one-third of the world's northern bleached softwood kraft pulp and 75 per cent of total capacity in North America. 'Big U.S. companies that supply (paper towel to) Walmart and Costco really need that northern bleached softwood kraft,' said Dunn. Canada is the biggest source of crude oil for the U.S., exporting four million barrels of the product per day. About 90 per cent of Canada's oil exports go to the U.S., mainly shipped through pipelines from Alberta to American refineries and south to the U.S. gulf coast. Rory Johnston, an oil market researcher and former economist at the Bank of Nova Scotia, said the Canadian and American oil trade 'is arguably the two most integrated petroleum systems on the planet.' 'The whole flow — so you have quality, you have geography, and you have pipelines, which basically exclude a functional capability for the United States to completely displace Canadian oil,' said Johnston. 'And even if (they) could, it would take a decade or more and hundreds of billions of dollars.' The costly process would include the U.S. having to retrofit refineries, build new pipelines and reverse existing pipelines — which Johnston calls a 'gigantic headache.' He added that U.S. oil production has slowed for decades and the recent drop in demand and prices due to trade headwinds could lead to production going into reverse. 'At those prices, we're likely going to stall out on U.S. crude production growth already, if not begin to contract outright,' said Johnston. 'So, the opposite of drill baby drill.' Despite Trump's rhetoric, crude oil is currently exempt under CUSMA. Aside from autos, steel and aluminum are the only goods on which Trump has applied 25 per cent sector-specific tariffs. Trump's issue with Canadian steel and aluminum has carried over from his first term, when he imposed Section 232 tariffs on Canadian metals in 2018. 'If we make it in the United States, we don't need it to be made in Canada,' said Trump in early February. Despite the imposition of tariffs in 2018, U.S. production capacity of steel and aluminum did not meaningfully increase, according to the Royal Bank of Canada. Overall, RBC said Canada's exports of steel and aluminum to the U.S. have increased by 35 per cent to US$17.7 billion since 2018. Canadian steel supports important U.S. industries like defence, manufacturing and shipbuilding. The North American steel market is also highly integrated, which allows it to better compete in the global market, which is subject to major overcapacity issues driven by China. Canadian aluminum and steel are also important for the U.S. auto industry, which can source the two metals in a cost-effective way. Bernard said nearly 60 per cent of aluminum used in U.S.-made cars is from Quebec. 'That's a great example of the American president and his team understanding that it's such a high amount of connected tissue, they can't start tariffing every layer of it,' said Bernard. 'Because that would mean layoffs right away for companies.' The Canadian aluminum sector can also produce more than its U.S. counterpart, because Canada has more access to electricity. The U.S. simply does not have enough electricity capacity to power the number of aluminum smelters needed to meet domestic demand, according to the Aluminum Association of Canada. Potash, a key nutrient for plants and input in fertilizers, is essential for agriculture worldwide. Canada leads the world in exports of potash, accounting for nearly 41 per cent of all global trade of the product, according to Natural Resources Canada. The only other countries that rival Canada's output are Russia and Belarus at 18 per cent and 16.6 per cent respectively. The U.S. is the major destination for Canadian potash, with Canada supplying nearly 80 per cent of its needs. 'We're the largest producer of potash in the world,' said Pierre Gratton, president and chief executive of the Mining Association of Canada. 'So, it's no surprise they are heavily reliant on our potash.' In response to criticism over what a tariff on potash would mean for American farmers, Trump lowered the tax to 10 per cent, before eventually announcing CUSMA exemptions for Canadian goods, including potash. U.S. production of potash accounts for just one per cent of demand, according to the Fertilizer Institute. The Russian and Belarusian potash industries also face challenges after the U.S. imposed trade sanctions on the two countries after Russia's invasion of Ukraine in 2022. Recently, Russia and Belarus have also floated the possibility of export controls on potash, to secure domestic supply and drive up market prices of the commodity. Any hopes of replacing Canadian supply in the near-term remain impropable for the U.S. In 2024, U.S. imports of non-fuel minerals and metals reached US$167 billion, 24 per cent of which came from Canada, the largest single source, according to the Royal Bank of Canada. Canada remains the U.S.'s biggest supplier of nickel and zinc and its second largest source of copper. On March 20, Trump signed an executive order to increase U.S. domestic production of critical minerals by speeding-up the approval and permitting of mineral production projects. Trump has said he would like to see U.S. reliance on Chinese minerals reduced , as China remains the leading international producer of critical minerals. 'They (the U.S.) are our largest market for many commodities and they're not really in a position to replace a number of them,' said Gratton. 'They're going to continue to rely on Canada for a number of critical minerals, even if they ramp up their own production.' For example, Gratton said there are few nickel projects in the U.S. In 2023, Canada produced 158,668 tonnes of nickel, ranking sixth in global production, according to Natural Resources Canada. Nickel remains a key input for lithium-ion batteries for electric and hybrid vehicles. Gratton said Canada can play a crucial role in replacing China's supply of critical minerals to the U.S. 'China controls the markets of many commodities, not least of which are rare earths, which have some pretty important applications in national defence and high tech,' said Gratton. 'So, the U.S. does need to find some alternative sources.' On May 4, Trump threatened to impose a 100 per cent tariff on films made in 'foreign lands' following a meeting that took place with Hollywood actor Jon Voight. 'What they have done is other nations are stealing the movies, the movie-making capabilities from the United States,' Trump told reporters on May 5. 'We are making very few movies now; Hollywood is being destroyed.' Many governments offer general tax credits to entice production companies to film in their country. In Canada, for example, the Alberta government's Film and Television Tax Credit offers a 22 per cent refundable tax credit on eligible costs incurred by foreign-owned productions. In 2023-2024, the Canadian film production sector contributed $11.04 billion to Canada's GDP. Andrew Addison, senior vice-president of strategic communications at the Canadian Media Producers Association, said the industry remains confused on how Trump plans to practically implement such a levy, given a film is not a physical good that crosses the border. Addison added that the film industry is highly integrated between Canada and the U.S. 'If you look at the film industry, there is no physical thing that gets moved back and forth. At any given time, hundreds of people from both sides of the border could be instantaneously working on stuff,' said Addison. 'The way the business works (isn't conducive to) the initial tariff proposal that was put out by the president.' Bookmark our website and support our journalism: Don't miss the business news you need to know — add to your bookmarks and sign up for our newsletters here.
Yahoo
14-05-2025
- Automotive
- Yahoo
Trump keeps saying the U.S. doesn't need Canada's stuff. We asked experts if he's right
In his Oval Office meeting with Prime Minister Mark Carney last Tuesday, President Donald Trump repeated his refrain that the U.S. doesn't need or want anything Canada produces, listing off a litany of goods he said his country would rather make itself. But can the U.S. really do without our stuff? We checked with economists and industry experts to see just how much the U.S. relies on eight of our biggest exports, and whether Trump is right in thinking they can go it alone. Trump made it clear during his meeting with Carney that the U.S. does not want Canadian-made vehicles. 'We want to make our own cars, we don't really want cars from Canada,' said Trump. 'At a certain point, it won't make economic sense for Canada to build those cars.' But North America's car industry is one of the most integrated in the world, originating with the Auto Pact that was signed by the U.S. and Canada in 1965. In 2024, Canada sent nearly 1.1 million vehicles to the U.S. and the U.S. exported nearly 630,000 vehicles to Canada, according to the Bank of Montreal. Charles Bernard, lead economist at the Canadian Automobile Dealers Association, said it will take billions of dollars in investment and 15 to 20 years for the American auto industry to replace the supply of vehicles it imports from Canada and Mexico. 'The tariff effects are certainly going to be negative for these companies, but moving back production would be even more costly,' said Bernard. 'He (Trump) paints a great image for the Americans about an industry that kind of made the nation and bringing it back, but there are structural elements that don't make it a possibility.' However, Bernard said Canada should be concerned about future investments in the industry if the country is no longer seen as having reliable tariff-free access to the U.S. market. Like automobiles, auto parts were supposed to be subject to a 25 per cent tariff, but the White House confirmed on May 1 that Canadian parts made in compliance with the Canada–United States–Mexico Agreement (CUSMA) would be exempted. Bernard said this decision was made following pressure from the U.S. auto companies that warned the tariffs on auto parts would lead to higher production costs and higher prices for vehicles. 'The industrial tissue that links these three countries, you can't necessarily break them and recreate it in America right away,' said Bernard. 'Not only will it have a direct impact on your ability to produce cars, but the cost would be extremely high.' According to the Canadian Chamber of Commerce Business Lab, Canada and Mexico account for 58 per cent of U.S. auto parts imports. It is also estimated that car parts cross the Canada–U.S. border six times on average before final assembly. 'You can't recreate that same optimization in four years,' said Bernard. 'You would need to readjust your supply, there would be suppliers in Canada that they wouldn't find in the U.S., because they don't have the expertise.' Trump has said the U.S. does not need Canadian lumber and, on March 1, he signed an executive order to accelerate U.S. domestic production of timber, lumber, paper and other forest products by deregulating logging on federal lands. The Canada–U.S. softwood lumber dispute goes back decades, with combined countervailing and anti-dumping duties on Canadian lumber currently sitting at just over 14 per cent. These levies are expected to go up to 34 per cent this fall. Trump has threatened to impose additional tariffs on top of the duties already in place but so far has not done so. This is because the U.S. relies heavily on Canadian lumber and paper pulp products. Canada supplies 24 per cent of the U.S.'s softwood lumber, which will be hard to replace. Ian Dunn, president and chief executive of the Ontario Forest Industries Association, said it would take five to 10 years for the U.S. to replace the Canadian market share. 'They would have to build new capacity, and they would have to build new mills,' said Dunn. 'A lot of mills in the U.S. south and pacific northwest, have shut down or curtailed in the last 16 to 18 months.' Canada is also a large source of paper pulp, a key input for thousands of different products including paper towels and toilet paper. Canada produces one-third of the world's northern bleached softwood kraft pulp and 75 per cent of total capacity in North America. 'Big U.S. companies that supply (paper towel to) Walmart and Costco really need that northern bleached softwood kraft,' said Dunn. Canada is the biggest source of crude oil for the U.S., exporting four million barrels of the product per day. About 90 per cent of Canada's oil exports go to the U.S., mainly shipped through pipelines from Alberta to American refineries and south to the U.S. gulf coast. Rory Johnston, an oil market researcher and former economist at the Bank of Nova Scotia, said the Canadian and American oil trade 'is arguably the two most integrated petroleum systems on the planet.' 'The whole flow — so you have quality, you have geography, and you have pipelines, which basically exclude a functional capability for the United States to completely displace Canadian oil,' said Johnston. 'And even if (they) could, it would take a decade or more and hundreds of billions of dollars.' The costly process would include the U.S. having to retrofit refineries, build new pipelines and reverse existing pipelines — which Johnston calls a 'gigantic headache.' He added that U.S. oil production has slowed for decades and the recent drop in demand and prices due to trade headwinds could lead to production going into reverse. 'At those prices, we're likely going to stall out on U.S. crude production growth already, if not begin to contract outright,' said Johnston. 'So, the opposite of drill baby drill.' Despite Trump's rhetoric, crude oil is currently exempt under CUSMA. Aside from autos, steel and aluminum are the only goods on which Trump has applied 25 per cent sector-specific tariffs. Trump's issue with Canadian steel and aluminum has carried over from his first term, when he imposed Section 232 tariffs on Canadian metals in 2018. 'If we make it in the United States, we don't need it to be made in Canada,' said Trump in early February. Despite the imposition of tariffs in 2018, U.S. production capacity of steel and aluminum did not meaningfully increase, according to the Royal Bank of Canada. Overall, RBC said Canada's exports of steel and aluminum to the U.S. have increased by 35 per cent to US$17.7 billion since 2018. Canadian steel supports important U.S. industries like defence, manufacturing and shipbuilding. The North American steel market is also highly integrated, which allows it to better compete in the global market, which is subject to major overcapacity issues driven by China. Canadian aluminum and steel are also important for the U.S. auto industry, which can source the two metals in a cost-effective way. Bernard said nearly 60 per cent of aluminum used in U.S.-made cars is from Quebec. 'That's a great example of the American president and his team understanding that it's such a high amount of connected tissue, they can't start tariffing every layer of it,' said Bernard. 'Because that would mean layoffs right away for companies.' The Canadian aluminum sector can also produce more than its U.S. counterpart, because Canada has more access to electricity. The U.S. simply does not have enough electricity capacity to power the number of aluminum smelters needed to meet domestic demand, according to the Aluminum Association of Canada. Potash, a key nutrient for plants and input in fertilizers, is essential for agriculture worldwide. Canada leads the world in exports of potash, accounting for nearly 41 per cent of all global trade of the product, according to Natural Resources Canada. The only other countries that rival Canada's output are Russia and Belarus at 18 per cent and 16.6 per cent respectively. The U.S. is the major destination for Canadian potash, with Canada supplying nearly 80 per cent of its needs. 'We're the largest producer of potash in the world,' said Pierre Gratton, president and chief executive of the Mining Association of Canada. 'So, it's no surprise they are heavily reliant on our potash.' In response to criticism over what a tariff on potash would mean for American farmers, Trump lowered the tax to 10 per cent, before eventually announcing CUSMA exemptions for Canadian goods, including potash. U.S. production of potash accounts for just one per cent of demand, according to the Fertilizer Institute. The Russian and Belarusian potash industries also face challenges after the U.S. imposed trade sanctions on the two countries after Russia's invasion of Ukraine in 2022. Recently, Russia and Belarus have also floated the possibility of export controls on potash, to secure domestic supply and drive up market prices of the commodity. Any hopes of replacing Canadian supply in the near-term remain impropable for the U.S. In 2024, U.S. imports of non-fuel minerals and metals reached US$167 billion, 24 per cent of which came from Canada, the largest single source, according to the Royal Bank of Canada. Canada remains the U.S.'s biggest supplier of nickel and zinc and its second largest source of copper. On March 20, Trump signed an executive order to increase U.S. domestic production of critical minerals by speeding-up the approval and permitting of mineral production projects. Trump has said he would like to see U.S. reliance on Chinese minerals reduced, as China remains the leading international producer of critical minerals. 'They (the U.S.) are our largest market for many commodities and they're not really in a position to replace a number of them,' said Gratton. 'They're going to continue to rely on Canada for a number of critical minerals, even if they ramp up their own production.' For example, Gratton said there are few nickel projects in the U.S. In 2023, Canada produced 158,668 tonnes of nickel, ranking sixth in global production, according to Natural Resources Canada. Nickel remains a key input for lithium-ion batteries for electric and hybrid vehicles. Gratton said Canada can play a crucial role in replacing China's supply of critical minerals to the U.S. 'China controls the markets of many commodities, not least of which are rare earths, which have some pretty important applications in national defence and high tech,' said Gratton. 'So, the U.S. does need to find some alternative sources.' On May 4, Trump threatened to impose a 100 per cent tariff on films made in 'foreign lands' following a meeting that took place with Hollywood actor Jon Voight. 'What they have done is other nations are stealing the movies, the movie-making capabilities from the United States,' Trump told reporters on May 5. 'We are making very few movies now; Hollywood is being destroyed.' Many governments offer general tax credits to entice production companies to film in their country. In Canada, for example, the Alberta government's Film and Television Tax Credit offers a 22 per cent refundable tax credit on eligible costs incurred by foreign-owned productions. In 2023-2024, the Canadian film production sector contributed $11.04 billion to Canada's GDP. Andrew Addison, senior vice-president of strategic communications at the Canadian Media Producers Association, said the industry remains confused on how Trump plans to practically implement such a levy, given a film is not a physical good that crosses the border. Canadian business leaders say trade diversification should be Ottawa's top priority: Léger poll Recruiting expats souring on the American Dream could give Canada an economic edge in duel with Trump Addison added that the film industry is highly integrated between Canada and the U.S. 'If you look at the film industry, there is no physical thing that gets moved back and forth. At any given time, hundreds of people from both sides of the border could be instantaneously working on stuff,' said Addison. 'The way the business works (isn't conducive to) the initial tariff proposal that was put out by the president.' • Email: jgowling@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBC
02-04-2025
- Automotive
- CBC
U.S. tariffs on the auto sector would substantially raise the sticker price of cars, experts say
Social Sharing If looming 25 per cent tariffs on the auto industry go ahead on April 3 as previously announced by the U.S. government, experts say they'll have a huge impact on the price of cars for Canadians. U.S. President Donald Trump's administration announced last week that a 25 per cent tax on all fully-built vehicles imported into the U.S. would go into effect on April 3. The 25 per cent figure would also extend to some key auto parts, including engines, transmissions and electrical components, and the White House left the door open to a levy on more auto parts down the road. Colin Mang, an assistant economics professor at McMaster University, says how the tariffs play out in the U.S. and how Canada reacts will impact how much the price of a car rises, but the dollar amount could increase anywhere from $1,000 to $8,000 Cdn. "What we're going to see is prices start to increase in the United States and that's going to have spillover effects here in Canada as well, because the prices will track each other," Mang said. WATCH | How much could car prices rise in Canada during a trade war? How much could car prices rise in Canada during a tariff war? 1 day ago Duration 1:43 Retaliatory tariffs by Canada would only add to the price increase, according to Mang. While there are about a dozen or so car models that are assembled in Canada that might not be as impacted by tariffs, the interconnected supply chain that sees car parts criss-cross North America many times before they end up in a vehicle will be affected. Mang says Canada exports some 1.1 million cars to the U.S. each year, so tariffs on the domestic auto industry could mean potential job losses. He noted that these changes would also undo the decades of work done since the inception of the 1965 Auto Pact, which sought to build a singular North American auto industry that both countries would benefit from. Charles Bernard, lead economist with the Canadian Automobile Dealers Association, agrees that tariffs would be quickly followed by a price hike. He says the current supply of cars on the lot would cushion the price increase ever so slightly, but as soon as those cars are sold, the sticker price would go up. "It would be a significant amount of money in a world where cars were already not cheap," Bernard said. Those looking to non-North American carmakers will also be out of luck, he says. Production for brands consumers might associate with Korea or Japan still often takes place in North America, so they're likely to see the same kinds of increases, according to Bernard. South Korean automaker Hyundai has already warned its prices could increase if the 25 per cent tariff by the U.S. goes into effect. WATCH | Autoworkers on edge: Canada's autoworkers on edge about Trump's incoming tariffs 5 days ago Duration 2:05 Canada's auto sector is on edge after the Trump administration announced 25 per cent tariffs on all car imports, raising fears of factory shutdowns and mass layoffs in an industry that supports hundreds of thousands of jobs. Tariff uncertainty already having an impact Mang says that for anyone in the market for a new car, trying to buy a vehicle before tariffs and reciprocal measures come in would be a smart choice. He says interest rates are down as well, giving prospective buyers another reason to purchase sooner rather than later. But at dealerships, the anticipation of tariffs on April 3 is already having an impact. Greg Carrasco, managing partner at Direct Nissan in Mississauga, says price panic has been keeping car shoppers away. "There is a lot of doubt … in the air and we see it," Carrasco said. "We're sitting [in] a holding pattern." He says he and other dealers around the Greater Toronto Area are using low interest rates and offers of no payments for the first six months on used cars in an attempt to attract buyers. He says these deals should have cars flying off the lot, but instead, sales have been quite moderate. Carrasco says it's a scary time to be a car dealer, given there's not much he can do except buy cars now and hope they can weather the storm. "We're just keeping our fingers crossed that the economic gods are going to be favourable to us," he said. Mang agrees that uncertainty because of tariffs is making an impact. He points to consumer confidence, which dropped drastically in recent weeks. The Conference Board of Canada puts the figure at 52.6 points — down by 12 points for the month of February, which is the biggest decrease in a year and a half. "People are really, really worried," Mang said. "They're worried about their jobs. They're worried the economy is heading to a recession, and so they're not really thinking about those big purchases like a new car." Bernard says there's some indication the market might be softening. He says February sale numbers show a slight dip (which can be partially explained by an expected decline in electric vehicle sales as incentives to buy EVs in Quebec ended last month) and notes that it looks like cars are sitting on lots longer. He says that factor on top of the trade war will be bad for dealerships. WATCH | Why experts say Trump's auto plan 'defies logic': Why experts think Trump's new auto tariff plan 'defies logic' | About That 2 days ago Duration 25:38 U.S. President Donald Trump is imposing a 25 per cent tariff on vehicles not made in the U.S. Andrew Chang explains why this threat is different. Plus, is now the perfect time to buy a home in Canada? The best thing people interested in buying a car can do is to pay a visit to their local dealership, which he says are best suited to explain where cost savings can be made with the tariff situation changing rapidly. "It might not always be about what is on the internet or what Trump is saying," Bernard said. "The direct connection, or the only way [you] can talk in a way with the … company building that car is through the dealership. And I think dealers will be well prepared."
CBC
28-03-2025
- Automotive
- CBC
Is there such a thing as a Made in America car anymore?
Donald Trump says he wants to see more vehicles made in America. It's a handy slogan and might once have been a viable idea. The problem is there's no such thing as a Made in America car anymore. And there hasn't been for years. Since Canada and the U.S. signed the Auto Pact in 1965, auto manufacturers have leveraged the comparative advantage in both countries to make the industry more competitive, production more efficient and vehicles more affordable. Experts say tariffs would effectively undo those advantages almost immediately. "It's the same Trump nonsense that is not backed by paperwork that is going to hurt [the] American auto industry worse than it will hurt Canada," said Flavio Volpe, head of the Automotive Parts Manufacturers' Association (APMA). A case study Any vehicle made in North America is manufactured via a complex web of interconnected supply chains that use raw materials and parts suppliers that span the entire continent. Consider the rear assembly of a car made in North America. That graphic was put together by the APMA. It says it's based on its members' actual contracts. Company names were redacted to respect competitive confidentiality. Each dot represents a different company providing the material or part required to complete the rear assembly. To break the process down even further, everything starts as raw material in one country, is shaped into a part in another, then moved again to be assembled into a broader component, before finally being assembled and eventually shipped to a customer. Rubber is processed in Monterrey, Mexico. It's shaped into a connector in Iowa. That piece fits into the control arm assembly made in Brampton, Ont. The control arm is put together as part of the rear suspension assembly in Detroit. The rear assembly is shipped to Windsor, Ont., for final assembly and eventually sold in California. The new NAFTA You could draw up a similar chain for each individual part in any car. The whole process is only doable when those components can move across borders tariff-free. That was a key component of the renegotiated North American Free Trade Agreement in 2018. When it was announced, Trump heralded the newly signed Canada-United States-Mexico Agreement as a breakthrough for the American auto industry. "Once approved, this will be a new dawn for the American auto industry and for the American autoworker," said Trump in 2018. And yet, as he announced his latest tariff salvo, Trump's proclamation essentially declared his own trade deal a failure. "I am also advised that agreements entered into before the issuance of Proclamation 9888, such as the revisions to the United States-Korea Free Trade Agreement and the United States-Mexico-Canada Agreement (USMCA), have not yielded sufficient positive outcomes," wrote the administration. But undoing the status quo will come with enormous cost. "No car is truly made in just North America," said Patrice Maltais from the industry association Global Automakers Canada. He says that continent-wide nature of the intricate supply chain cost billions of dollars and took decades to build. "You have to basically untangle a lot of those supply chains and put new ones down, and that takes a lot of time and it takes a lot of money." He says a new manufacturing plant could cost anywhere from $2 billion to $10 billion. "That's just the plant, then you have to look at all the supply chains for that plant." Even if the automakers actually agreed to move production to the U.S., it would take years to build. Tariffs would erode industry, experts say In the meantime, experts say the industry would be clobbered by tariffs. "You'll feel it almost immediately," said Jan Griffiths, a former American auto executive and founder of the industry association Gravitas Detroit. WATCH | Carney announces plan meant to help workers affected by tariffs: Carney announces $2B 'strategic response fund' to help workers affected by Trump's tariffs 2 days ago Duration 1:47 During a Day 4 campaign stop in Windsor, Ont., Liberal Leader Mark Carney announced that if he's elected prime minister, a $2-billion 'strategic response fund' will be created to help workers affected by tariffs imposed by U.S. President Donald Trump. The fund would help create an all-Canadian network for automobile component manufacturing. Rather than trying to use tariffs to force change that would cost everyone, she says Trump should offer a viable path forward for Canada, Mexico and the United States. "If this is about renegotiating USMCA, then let's do it, but let's do it now and let's take the uncertainty out of the system. Businesspeople cannot handle this level of uncertainty," she told CBC News. But Griffiths says the manufacturing base that once existed in the U.S. "is no longer here." It was long ago replaced by one of the most efficient and most cost-effective manufacturing processes in the world. Even the threat of undoing that network has already shaken markets, eroded confidence and prompted a nearly unprecedented level of concern among one of the biggest industries on the continent.
Yahoo
27-03-2025
- Automotive
- Yahoo
Trump going ahead with 25% tariffs on autos
U.S. President Donald Trump has levelled what may be his most devastating tariffs yet, hitting a sizable chunk of the cross-border auto trade and potentially all of it at a later date. A new 25 per cent duty will strike all finished vehicles imported into the United States starting on April 3, then some parts within weeks and perhaps all parts eventually. It's a frightening prospect for hundreds of thousands of Canadians whose jobs are connected to the auto sector — the largest manufacturing industry in Canada and second-largest source of exports to the U.S. after oil. Amid the confusing tangle of tariffs, one goal stands out with striking clarity. Trump laid it bare from the Oval Office as he announced the measures. His clear objective? Make life so difficult for companies that export to the U.S. that they simply give up and move production lines there. "All we're doing is saying you can't come in unless you build here," Trump said on Wednesday. His stance marks the end of a decades-long period of Canada-U.S. free trade in automobiles. In fact, Trump is even imposing higher U.S. tariffs than existed before the 1965 Auto Pact. Autos are by far the most lucrative manufactured product that Canada sells to the world. This makes these tariffs potentially more significant than any of the other trade threats from Trump, including the 10 per cent levy on energy and the 25 per cent tariffs on steel and aluminum. The full impact is not yet clear. Trump has not explicitly spelled out how many component parts will be penalized. Cars exported to the U.S. under the Canada-United States-Mexico Agreement (CUSMA) might yet be hit with tariffs on their non-American components, pending a review, according to the executive order. Federal leaders speak out against tariffs The news swiftly reverberated in Canada on the campaign hustings. Liberal Leader Mark Carney said he would return to Ottawa and, as prime minister, convene a meeting on Thursday of the Canada-U.S. cabinet committee. He suggested that retaliatory measures might follow, and he fumed at Trump's actions as an abdication of the continental trade agreement. WATCH | Liberal Leader Mark Carney has proposal to protect auto industry: "This is a violation and he has betrayed our trade agreement," Carney said. "A response will happen soon. I won't say more. When it comes to our options, we do have options." Earlier Wednesday, Carney promised a $2-billion package to protect Canada's auto industry. Conservative Leader Pierre Poilievre said Trump needs to "knock it off" with his trade war. "We had the best trade relationship in the world, in the history of the world, before these unnecessary interruptions struck our economy, and they're hurting both sides of the border," he told reporters Wednesday evening. WATCH | Canada will protect autoworkers, Pierre Poilievre says: Poilievre blamed Liberal "weakness" for the position Canada is in and said the country needs to diversify its trade markets and cut taxes to help workers and businesses. NDP Leader Jagmeet Singh said Trump's latest action was a "full frontal attack on autoworkers." "There are hundreds and thousands of workers right now that are wondering if their line is going to shut down and if they're going to lose their job.... We've got to fight back like hell," he said. Singh called for retaliatory tariffs and supports for workers, and said Carney should have recalled Parliament to pass legislation to support workers before calling an election. Ontario Premier Doug Ford said Canada will need to fight the new tariffs — and called for retaliatory tariffs that "maximize the pain for the Americans." "I feel terrible for the Americans, but it's one person, it's President Trump that is creating this chaos," he told reporters at Queen's Park. "We aren't going to roll over. We're going to do everything we possibly can." WATCH | How do auto tariffs affect battleground ridings in Ontario?: One analyst lamented that this is a departure from 60 years of tradition, starting with the 1965 Auto Pact that led to Canada-U.S. free trade. Furthermore, it makes a mockery of the agreement that Trump himself signed, CUSMA, which was supposed to allow for stable, predictable trade. "The Americans have lost their credibility in terms of being a reliable trading partner," said Fraser Johnson, an expert on auto supply chains at Western University's Ivey Business School in London, Ont. He said Trump's initial move won't fully stall the industry. For starters, nearly three-quarters of Canada's auto jobs involve parts, not finished vehicles. But the vast majority of those finished vehicles are exported to the U.S. The tariffs will do real damage, Johnson said, with little benefit to the U.S., as it takes years to build new assembly plants, meaning new supply lines won't magically appear in the U.S. overnight. "This is not good news for anybody," he said. "I don't really see how it helps the North American auto industry — certainly in Canada but also in the U.S." Flavio Volpe, president of the Automotive Parts Manufacturers' Association, said it's creating paralyzing uncertainty for the industry — and not just in Canada. The constant, always-evolving tariff threat is also scaring investors in the U.S., he told CBC News. "[Trump] moves the sticks twice a day," he said on Wednesday while awaiting the announcement. "You don't know what to expect when you get up in the morning." An employee works on the production line at the Martinrea auto parts plant in Woodbridge, Ont., on Feb. 3. The facility supplies parts to auto plants in both Canada and the U.S. (Chris Young/The Canadian Press) Speaking before the announcement, Volpe correctly predicted the 25 per cent tariff, but with some exemptions, possibly on North American parts traded under rules in CUSMA, the deal Trump himself made. Canada is, indeed, a rare trading partner for the U.S. Unlike the rest of the world, it actually buys more cars and parts from the U.S. than it sells. The first Trump administration produced a report on auto tariffs and it barely mentions Canada. It showed that Canada's share of North American auto production has been relatively stable since the 1980s, and that the real shift has been from U.S. production to Mexico. But this second Trump administration is more aggressively embracing trade protectionism, and the threat of it, in the hope of steering production to the U.S.
