Trump’s Auto Tariff Threats Stir Tensions Ahead of Canadian Election

In a move that has sent ripples through the North American automotive industry, former U.S. President Donald Trump has once again turned his attention to Canada, threatening a potential increase in the already controversial 25% tariffs on Canadian-made automobiles. Speaking from the Oval Office, Trump declared that while no changes are currently planned, “at some point they could go up,” reaffirming his stance on reshoring American auto manufacturing.

The timing of Trump’s remarks is particularly sensitive, coinciding with Canada’s federal election. While he refrained from commenting on his preferred candidate—saying it would be “inappropriate”—Trump nonetheless took the opportunity to criticize Canada’s trade practices. He reiterated his dissatisfaction with the longstanding economic interdependence between the two nations, specifically highlighting oil, lumber, and “particularly cars.”

“They took a large percentage of the carmaking, and I want to bring it back to this country,” Trump said. “I really don’t want cars from Canada.”

Trump’s threat adds pressure to a sector already strained by trade disruptions and economic uncertainty. North American auto production is highly integrated, with parts frequently crossing the U.S.-Canada border multiple times during assembly. The imposition of tariffs has disrupted this ecosystem, leading to temporary plant closures and layoffs in Canada.

Canadian political leaders have been quick to respond. Liberal leader and caretaker Prime Minister Mark Carney has pledged a $2-billion strategic fund to stabilize the auto sector and build a national auto manufacturing network. His plan focuses on increasing Canadian content and leveraging government support to make homegrown vehicles a priority.

Conservative Leader Pierre Poilievre has proposed a temporary sales tax cut for Canadian-made vehicles and included the auto sector in a $3-billion loan program to support industries hit by tariffs. Meanwhile, NDP Leader Jagmeet Singh has promised to use all legal tools to prevent publicly funded companies from relocating operations abroad. He has also committed to requiring federal agencies to buy Canadian-made vehicles, reinforcing domestic demand.

Despite political divisions, all major Canadian parties appear united in their determination to protect the nation’s auto industry from external shocks.

Economists warn that the ripple effects of the tariffs will not be limited to Canada. A 2025 study from the Center for Automotive Research estimates U.S. automakers could see costs rise by an additional US$108 billion due to these tariffs. While some manufacturers—like Honda, Volkswagen, and Hyundai—have announced new investments in U.S. facilities, these decisions may have more to do with risk mitigation than endorsement of the tariffs.

Trump’s rhetoric adds another layer of complexity to cross-border relations. In a surprising aside, he floated the idea—again—that Canada would make a great U.S. state. “As a nation … it doesn’t make sense,” Trump said. “If we needed something, that would be a different subject.”

Yet, even as he critiques Canada’s role in trade, Trump acknowledged ongoing diplomatic efforts. He described his conversations with Carney as “very nice” and confirmed that discussions are underway for a new comprehensive trade and security agreement after the Canadian election.

For now, Canada’s auto sector braces for what could come next. As Canadian leaders vie for votes with promises to protect and revitalize the industry, Trump’s unpredictable tariff policy looms large. The coming weeks may prove critical—not only for the future of Canada’s auto industry but for the broader dynamics of North American trade.