Detroit automaker group pushes back on Canada’s tariffs

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The lobbying group behind the Detroit Three automakers says the Canadian government is making a mistake by imposing tariffs on some U.S. vehicle imports, a decision that has the support of Canadian unions and industry leaders.

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The federal government said Thursday it will limit the number of vehicles Stellantis and GM can import duty-free after both companies announced planned production cuts, leaving thousands of Canadians unemployed.

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In April, Ottawa granted an exemption from retaliatory tariffs to some automakers on the condition that they retain jobs and investments in Canada, but because of production cuts, the government cut the number of vehicles Stellantis can import duty-free by 50 per cent and for GM by 24 per cent.

But the decision makes it harder for automakers to invest in Canada at a time of enormous pressure on the industry, said Brian Kingston, head of the Canadian Automobile Manufacturers Association.

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“We're trying to do everything we can to protect this footprint, to keep jobs here in Canada, but now the government doubling down and imposing additional tariffs on manufacturers is not helping,” Kingston said.

He said the government needs to work with industry to make Canada competitive, while policies like the electric vehicle mandate and recent moves aimed directly at companies aren't helping.

“With the measures being taken today, as well as threats of legal action, it is becoming increasingly difficult to imagine a world in which companies want to invest here.”

The government's action comes after Stellantis announced last week that it would move long-planned production at its Brampton, Ont., plant to Illinois, along with more than 3,000 jobs.

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This week, General Motors announced it will not resume production of electric vans at its plant in Ingersoll, Ontario. as planned in November due to low demand. The plant employed more than 1,000 workers before it was shut down in May.

The decisions prompted union leaders, including Unifor national president Lana Payne, to call for a tough response, including using the tariff lever to counter pressure brought by US President Donald Trump.

“We cannot negotiate on our knees. We need to fight back. We cannot remain silent while we kill jobs and our workers and industries are attacked by unfair and punitive tariffs,” Payne said in a statement Friday.

Flavio Volpe, president of the Automotive Parts Manufacturers Association, said that given that Stellantis imported about 130,000 vehicles last year, the government's tariff change could mean hundreds of millions of dollars in costs for the automaker.

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“That's how you get someone's attention. That's how you put pressure on the decision-maker to change their decision.”

He said he understands the tough balance automakers are trying to strike, but that Canada didn't start this fight and the companies will have to decide which side they're on.

“Canada provided aid to the companies that supported it, and if they don't want to lose that aid, they should probably transfer production to these two plants.”

Finance Minister Francois-Philippe Champagne said in a statement Thursday that the government is committed to maintaining a strong Canadian auto industry but is deeply disappointed that GM and Stellantis are reneging on their commitments.

“Our government stands firmly behind our auto industry and its workers and will not hesitate to take decisive action to protect it and ensure that we only support those who invest in Canada's future.

Thursday's tariff decision was overshadowed by Trump's abrupt halt to broader trade talks after sharply criticizing an ad campaign run by the Ontario provincial government that featured footage of former U.S. President Ronald Reagan saying tariffs were hurting the economy.

Standing on the tarmac outside the Ottawa airport Friday morning, Carney said Canadian negotiators are “ready” to resume negotiations but Canada cannot control U.S. trade policy, which has “fundamentally changed.”

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