U.S. President Donald Trump on Wednesday signed an executive order that he said imposes 25 per cent tariffs on the auto industry, saying the duty would go on all vehicles made outside the U.S. starting April 2.
The announcement is the latest in a set of tariffs that Trump has vowed against various countries since taking office, but the auto-specific duties have been floated by the president for weeks.
“This is the beginning of Liberation Day in America,” Trump said. “Before I was elected, we were losing all of our plants that were being built in Mexico and Canada and other places. Now, those plants largely have stopped and they’re moving them to our country.
“We’ll effectively be charging a 25 per cent tariff. But if you build your car in the United States, there’s no tariff.”
The executive order signed applies to foreign-made cars and light trucks, in addition to tariffs already in place on those goods.
“We’re signing today, it goes into effect April 2, we start collecting on April 3,” Trump said.
Those tariffs on the auto sector, which is already dealing with the impact of 25 per cent duties on steel and aluminum, could have a further impact as consumers also grapple with the broader set of 25 per cent tariffs imposed at the start of March on all Canadian and Mexican goods.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, said the new policy was confusing and damaging.
“I have never heard something less clear or based in fact in my life,” he wrote in a social media post.
“China could only dream of damaging the American auto industry so quickly and so decisively as what Trump is threatening to do here again.”
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In Ontario, the federal and provincial governments have poured tens of billions of dollars into the auto industry.
Over the past few years, Ford and then-prime minister Justin Trudeau announced construction aid and tax-relief subsidies to tempt companies like Volkswagen, Stellantis and Ford Motors to anchor electric vehicle operations and battery plants in the province.
The companies which settled on Ontario to house their operations rely on parts manufacturers and assembly lines on both sides of the U.S.-Canada border.
When Trump first announced his tariffs on vehicles, Ford suggested the assembly lines wouldn’t last much longer than a week before being forced to close.
“Assembly lines and the auto sector will shut down within 10 days, I predict. Hopefully they won’t, but I’m predicting they’ll shut down because of the trade that we do back and forth,” Ford said at the beginning of March.
“Parts, as you’ve heard many times, go back and forth up to eight times, each time hitting a 25 per cent tariff on both sides of the border. I am almost positive the assembly plants will shut down on both sides of the border.”
A total of five major auto manufacturers — Ford, General Motors, Honda, Stellantis, Toyota — already call Ontario home, along with 350 parts manufacturers and future commitments from other car companies.
In 2023, 30 per cent of Ontario’s exports were vehicles or auto parts. The figure amounts to $68 billion.
During the recent Ontario election, Ford promised he would support areas like Windsor, Ont., if tariffs did hit. His party promised to open triage centres for workers who were laid off and pour money into retraining.
Ford had separately worried about Trump’s attempts to take jobs from Ontario.
At the beginning of March, the day after introducing auto tariffs, Trump paused them, citing his desire not to hurt American companies in the U.S.-Canada trade war.
The premier said that move was not a blessing but a bigger threat.
“I always worry when someone says 30-day reprieve that gives them a chance to start lining things up and planning their next move,” Ford said on March 5. “As we all know, what the president says today may change tomorrow. We’ve seen this pattern; the goalposts change constantly.”
Ontario also caught Trump’s attention – and ire — in mid-March when he briefly levied a 25 per cent surcharge on energy exported to the United States.
That retaliatory measure last less than 48 hours and secured Ford a meeting in Washington D.C. With Trump’s commerce secretary.
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