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Trump Tariffs Could Bring North American Auto Production ‘To A Screeching Halt’

The tariffs U.S. President Donald Trump imposed on Canada and Mexico over the weekend – set at 25 percent for most products imported into America from its northern and southern neighbors – could cripple U.S. auto production, Automotive News reports.

“Nothing that Donald Trump says will change the fact that he will bring his own industry to a screeching halt,” the head of the Automotive Parts Manufacturers’ Association, Flavio Volpe, says, quoted by Automotive News.

U.S. President Donald Trump.

The 25-percent tariffs go into force on Tuesday, February 4th, 2025. They will affect both complete vehicles produced in Canada and Mexico and shipped to the United States, and parts and components produced in the two North American countries and sent to the U.S. for use in domestic production there.

GM previously stated it had plans in place to mitigate the effects of tariffs on its business. These include importing extra vehicles and parts ahead of the tariffs and increasing U.S. production of several popular pickup models. However, multiple industry figures agree with Flavio Volpe that the tariffs will likely bring the whole North American auto industry to a standstill.

Trump tariffs threaten GM production at Oshawa and other plants.

Chevy Silverado Trucks Produced In Canada

Because of narrow profit margins in the automotive industry, tariffs on vehicles and parts will likely make production unprofitable and force automakers to pause their factories while the tariffs remain in place. Retaliation by Canada and Mexico, and counter-retaliation by Trump raising tariffs even higher, would simply worsen the impact and make automotive production even more economically infeasible.

About 1 million jobs in the United States and Mexico, and 100,000 jobs in Canada, could be directly affected by the Trump tariffs. The wider impacts would almost certainly negatively impact the entire economy of all three countries. Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association (which represents GM as well as its rivals Ford and Stellantis), says “tariffs on vehicles and parts will reduce North American vehicle production, increase vehicle prices, and lead to job losses at manufacturing facilities across the continent.”

The UNIFOR flag.

Lana Payne, president of the UNIFOR union, remarked that “Trump’s decision to go to battle with America’s largest trading partner will hurt working people on both sides of the border and inflict real economic damage to both countries.”

Various other figures in the Canadian auto industry agreed, as well as predicting political difficulties for Trump, even from his own current supporters, once the full effects of the tariffs are felt.

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