An auto industry leader says U.S. president-elect Donald Trump’s threat of tariffs on Canadian goods would have devastating effects for the sector, forcing both Canadian and U.S. consumers to pay higher prices.
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Flavio Volpe, president of the Automotive Parts Manufacturers Association, says it’s unreasonable to apply such a tax to vehicle parts, which may cross the border up to eight times before ending up in a finished vehicle.
Trump sparked backlash among Canadian business and political leaders after posting to Truth Social on Monday that he will sign an executive order imposing a 25 per cent tariff on all products coming to the United States from Canada and Mexico.
Volpe says cars “would cease to be made by American companies” with tariffs that high, noting the auto industry works with single-digit profit margins.
He says any cross-border tax would increase the cost of components and raw materials that go back and forth between the neighbouring countries, leading to a slowdown in production and higher prices at the dealership.
Trump’s social media post had said such a tariff would remain in place until Canada and Mexico stop drugs and people from illegally crossing the borders.