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Globe and Mail
4 days ago
- Automotive
- Globe and Mail
Plunge in automotive exports leads record Canadian trade deficit
Canada's exports of automobiles to the U.S. fell by 23 per cent in April as vehicle makers cut production in the first month that President Donald Trump's tariffs kicked in. Combined with parts, automotive shipments to Canada's largest trading partner plunged by more than 17 per cent in value from the previous month, the largest sectoral drop in merchandise trade shipments reported by Statistics Canada on Thursday. Carmakers based in Ontario have responded to the tariffs by slashing production, idling assembly lines and laying off workers. 'The tariff impacts are significant, and it makes it very challenging to build a vehicle in Canada and export it to the U.S. in the face of a 25-per-cent tariff,' said Brian Kingston, president of the Canadian Vehicle Manufacturers' Association, which represents Ford Motor Co., General Motors and Stellantis NV in Canada. The U.S. and Canadian auto industries are highly integrated, an efficient system built on decades of free trade. The U.S. is the buyer of almost all of Ontario's auto production, Mr. Kingston noted by phone. Mr. Trump says his rollout of tariffs on most trading partners is intended to bring home manufacturing and spur countries to stop the flow fentanyl and illegal migration while balancing trade. His tariff policies have changed repeatedly, leading to chaos in the auto industry and other sectors. The U.S. auto industry has called the tariffs inflationary and bad for sales and production. It takes years and billions of dollars to move supply lines and factories, industry members and experts say. 'This data just underlines the importance of getting to an agreement with the Americans as quickly as possible, removing these tariffs and returning to North American automotive production,' Mr. Kingston said. Canadian-assembled vehicles are subject to a 25-per-cent tariff, reduced by the amount of U.S. content, which is typically about 50 per cent. Canadian parts enter the U.S. tariff-free but are subject to duties when attached to a Canadian-made car. Canadian auto-parts factories depend on vehicle assembly plants for about half of their sales. Ahead of the tariffs, Canadian vehicle exports rose by 21 per cent, Statistics Canada said, as U.S. importers rushed to beat the duties. Flavio Volpe, head of the Automotive Parts Manufacturers' Association and represents Canadian suppliers, said the tariffs are hurting companies in Canada and the U.S. He noted three of Ontario's vehicle exporters are Detroit-based. 'We're so intertwined, half of that effect is being borne by American balance sheets,' Mr. Volpe said, calling the drop in shipments a 'self-inflicted wound.' Ontario is home to a Stellantis NV minivan and Dodge Charger plant in Windsor; a General Motors pickup truck plant in Oshawa and a parcel van factory in Ingersoll; a Honda factory in Aliston; and Toyota plants in Cambridge and Woodstock. Two other sites are closed and awaiting retooling for new vehicles: Ford Motor Co. in Oakville and Stellantis in Brampton. Since the tariffs kicked in, GM and Stellantis have announced layoffs, production reductions or delays and periodic shutdowns of assembly lines. Honda has delayed a massive electric vehicle project.
CTV News
14-05-2025
- Automotive
- CTV News
Looking at the future of EV after Honda delays Ontario project
Watch Brian Kingston of the Canadian Vehicle Manufacturers' Association speaks about the EV market and what's behind the decline of sales.
CBC
30-04-2025
- Automotive
- CBC
Carney is elected. What comes next for trade?
Prime Minister Mark Carney spoke with U.S. President Donald Trump by phone on Tuesday, following his election win, while, separately, Trump signed an order to soften the blow of his auto tariffs with a mix of credits and relief from other levies on materials. Brian Kingston, the president of the Canadian Vehicle Manufacturers Association, says Canadians sent a 'clear message' by electing Carney to 'come out of this stronger and better.'
CBC
13-02-2025
- Automotive
- CBC
Can Canada just build its own cars? Experts say no — here's why, and what we could do instead
Social Sharing U.S. President Donald Trump's threats of tariffs on Canadian products and his imposition of tariffs on imported steel and aluminum have triggered alarm in the Canadian auto sector, with experts warning of possible work stoppages and supply chain disruptions. But experts say building cars in Canada for the Canadian market isn't the answer — instead, Canada could look outside the "north-south" corridor in the face of tariffs. Canada has a strong and thriving manufacturing sector with five global auto manufacturers, said Brian Kingston, the president and CEO of the Canadian Vehicle Manufacturers Association. "But the whole industry has been designed around this north-south integration," he said. "If we are entering an era of highly protected domestic markets … that is highly inefficient. It's extremely costly to do because Canada is a relatively small market." Canadians purchase under two million vehicles each year – about the same number the country assembles, he said. But the cars assembled in Canada are largely destined for the U.S. market. Trump wants Canadian-assembled vehicles made in Detroit Trump has expressed his disdain for those exports, saying he'd rather build the cars in Detroit. The U.S. president has three times since his Jan. 20 inauguration threatened tariffs that would affect the North American auto industry. He first promised 25 per cent tariffs on all Canadian goods and a 10 per cent tariff on energy, all of which have been suspended for 30 days while Canada seeks to address U.S. concerns about border security. Then on Monday, Trump told a Fox News reporter that he would levy a tariff of up to 100 per cent on Canadian-made automobiles, "if [the U.S. doesn't] make a deal with Canada." That same day, he announced a 25 per cent tariff on imported steel and aluminum to take effect March 12. But the auto industry has become so integrated over the past 60 years as a result of successive free trade agreements that car components travel across the Canada-U.S. border multiple times before a final vehicle rolls off the assembly line, said Dimitry Anastakis, a professor in the Rotman School of Management at the University of Toronto. Tariffs preventing the free flow of parts between Canada and the U.S. could lead to work stoppages due to cross-border supply chain disruptions, Kingston has said. However, building vehicles for the Canadian market in Canada is "a cute idea" but not a sustainable alternative, according to a mechanical and automotive engineering professor at the University of Windsor. Peter Frise was part of a team that tried to design a Canadian car and said they couldn't get industry to touch it. Australia unable to sustain domestic auto industry, expert says "It was absolutely out of the question," said Frise, who founded the National Automotive Research Network in 2000. "As soon as we talked to industry about it, they started slamming the door as hard as they could on that. … They said that is absolutely impossible. We would never do that. We don't even want to talk about it. …We could never afford to do that." For example, Australia tried for many years to compete in the auto sector, said Dennis Darby, the president and CEO of Canadian Manufacturers and Exporters. "It had its own car companies, which were all global car companies that operated in Australia protected by tariffs," Darby said. "And they eventually gave up, and there's no production at all in Australia because they just couldn't." It was once common to see branches of American plants in Canada building all kinds of products for the Canadian market, but technology has evolved, Darby said, and auto makers have consolidated. "It's just not practical to build a car company from scratch," Darby said. "The last person to do that was Elon Musk, and he had billions of dollars of capital." These days Canada is home to massive parts manufacturers such as Magna International, which produce products for the global supply chain. Canada needs to look for new markets, expert says The best course of action for Canada, he said, is to look at ways to grow the market for those products outside the U.S. "What we have not done as Canadians is build really good east-west corridors," he said. "We have these free trade agreements with Asia, and we have free trade agreements with Europe. And … we have not taken advantage of those." Frise said Americans will also find themselves struggling as a result of the tariffs and tariff threats. About 90 per cent of the aluminum used in the auto industry comes from Quebec, he said. "They can't realistically replace it," Frise said.
CBC
12-02-2025
- Automotive
- CBC
Possible tariffs 'untenable' for auto sector, as latest threats cause uncertainty in Windsor
One Windsor car salesman says he's in wait and see mode after U.S. President Donald Trump threatened tariffs of up to 100 per cent on Canadian-made automobiles. Jeff Pawluck, the new car sales manager at Motor City Chrysler, says he hasn't heard much from his staff yet about the tariff threat. "We've had a couple of sales guys say that they got messages that people were worried maybe about their job," Pawluck said. "We haven't heard that much of it yet because we just don't know the impact." Pawluck says he and the industry have survived hard times before, such as the 2008 financial crisis, and he hasn't made any major moves in response to the latest threat. He has not, for example, been stocking up on cars, because it costs money to have inventory sit on the lot. But he said consumers considering a car purchase do have some warning of possible price increases ahead. "You know, if a person is looking at something in … the immediate future, is it probably going to be cheaper today than it would be if there [were] tariffs put on? Probably a million per cent." Trump made the tariff threats during an interview with Fox News on Monday. "If we don't make a deal with Canada, we're going to put a big tariff on cars," he said. "Could be a 50 or 100 per cent because we don't want their cars, we want to make cars in Detroit." Trump made the comments the same day he imposed 25 per cent tariffs on all steel and aluminum imports. He previously threatened 25 per cent tariffs on all Canadian products and 10 per cent on energy. The president of the Canadian Vehicle Manufacturers Association said his members have "deep concern" with the latest remarks. "This industry has been founded on integration," Brian Kingston said. "That's what makes Canada and North America competitive as an auto manufacturing jurisdiction. … So when proposals come forward to put in place tariffs that is effectively a tax. It raises costs, it has impacts on production and it challenges the competitiveness of the industry in a very very challenging global environment now." The CEO of the Canadian Manufacturers and Exporters Association called the possible tariffs "clearly untenable on a whole pile of levels." Dennis Darby said Canada needs to get to the bottom of what the tariff threats are really about. "This is clearly not about protecting or improving American jobs at this stage," he said. "I'm hopeful that the care companies in the U.S. … will speak up. It's going to have to be American stakeholders who speak up because I can't think of any other way out of this. The president of Unifor Local 195, which represents some smaller manufacturers in the auto sector, said the union and the government have worked hard to attract investment to Windsor. He said he hopes Trump's actions will not lead to investors changing their mind about Canada and moving south of the border. But Emile Nabbout said that chaos can lead to opportunity. "We have to be relying on ourselves," Nabbout said. "We learned this from COVID that we shouldn't be relying on other countries in the minute of chaos. This is the second wake up call for all our political leadership in this country." Canada, Nabbout said, needs a comprehensive industrial policy that covers everything from natural resources up to manufacturing, one that will protect Canadians going forward.
