» Latest tariffs major concern for integrated auto sector

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The auto industry is sounding the alarm about U.S. President Donald Trump’s latest tariff announcement.

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Trump announced Wednesday he would impose 25 per cent tariffs on auto imports to the U.S., set to take effect next week. He also said the Detroit Three automakers have to move their parts divisions back to the U.S.

Flavio Volpe, president of the Automotive Parts Manufacturing Association, says Trump risks essentially shutting down the industry and costing many Americans their jobs.

“If (Trump) insists on tariffs on Canada and Mexico, his reward will be risking the employment of a million American autoworkers. He either doesn’t understand how intertwined we are or doesn’t care,” he said in an interview on Wednesday.

The North American auto industry is highly integrated, meaning auto parts can cross the border several times before they’re part of a finished car.

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The Canadian Chamber of Commerce said parts can cross international borders up to eight times, with tariffs adding potentially thousands of dollars to the final cost of the vehicle.

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The White House said automobiles imported under the Canada-U.S.-Mexico Agreement will only face tariffs on the value of content not made in the United States.

The tariffs apply not only to whole vehicles, but also to certain parts like engines and transmissions. Parts subject to the trade agreement won’t face the new tariffs until the U.S. figures out how to apply tariffs to their non-U.S. content, the White House said.

Volpe warned that tariffs could lead to shutdowns on both sides of the border.

“Donald Trump doesn’t care about the wake he leaves in U.S. industry, and I think Canadians and other allies should disavow themselves of the idea that we can plead a case for our industries,” he said.

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It would cost tens of billions of dollars to move production back to the U.S., TD economist Andrew Foran said in a January report on tariffs’ potential effects on the auto sector.

Unifor has said that tariffs jeopardize many Canadian jobs.

“You have to realize it’s compounding tariffs on the auto industry. We use steel and aluminum to build cars. There’s a tariff on that. There’s a tariff that will be on finished vehicles, from what we understand, and the parts, the Canadian parts that are in that vehicle will be tariffed,” said national president Lana Payne at a press conference Wednesday.

“So what will this mean? … I don’t know yet, but what I can tell you is that none of this is good for Canadian jobs and Canadian workers right now.”

Dave McDowell, president of Unifor Local 1859, said on Wednesday that autoworkers in Canada are facing a lot of uncertainty ahead of Trump’s looming April 2 deadline, when not only these new auto tariffs but other tariffs as well are set to be enacted.

“We don’t know where our business is headed, what’s going to be happening with us in the future.”

— With files from David Baxter

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