‘He’s looking to exact some pain': auto sector warns of repercussions if Trump follows through on tariffs

CTV News Toronto’s Sean Leathong takes a closer look at what a proposed 25 per cent tariff at the border could mean for some GTA business

From the smallest parts to the assembly line in plants like Ford and General Motors - the threat of 25 per cent tariffs by U.S. President Donald Trump against the Canadian auto sector create sobering fear.

“He’s looking to exact some pain,” says Auto Parts Manufacturers Association (AMPA) President Flavio Volpe.

The AMPA represents 250 independent parts producers. Volpe says the pain could be immense.

“I’m worried about some auto parts companies and actual major automakers becoming casualties in a fight that none of us need to have,” he says.

Passenger cars and auto parts represent the second and third largest Canadian exports to the United States - worth over $55 billion and just under $23 billion annually.

Volpe says a tariff this size turns a profit into a loss.

“So any time you put in 10 per cent or 5 per cent, you are causing an existential threat to those businesses, the health of those businesses. 25 per cent is nuts,” he says.

Volpe is familiar with a tariff fight having worked with the Canadian government during the previous Trump administration and earning praise from Prime Minister Justin Trudeau and Chrystia Freeland when the Canada-United States-Mexico Agreement (CUSMA) was ratified.

Trump did not mention Canada in his inaugural address Monday, but the new U.S. president laid the groundwork.

“We will tariff and tax foreign countries to enrich our citizens,” he said.

Volpe says though the pain will be felt here in Canada, tariffs will not enrich Americans.

“The first people to feel the pain will be the Americans,” he says. Adding, “the first companies to feel the pain are Americans.”

In part 1 of this series, CTV News Toronto walked through auto parts maker Ultra Form Manufacturing in Etobicoke, where owner Kacee Vasudeva says Canada and the U.S. are too intertwined.

“Even if Mr. Trump does whatever he does, he can’t unwind it,” says Vasudeva.

One example is raw materials. Parts made in Vasudeva’s plant are mostly aluminum, a metal that Canada exports to the U.S. in great quantities.

Aluminum Association of Canada CEO Jean Simard says, “the U.S. consumes five million tons in a year, but only produces 700,000 tons. So they are a highly deficit market and totally dependent to imports, especially from Canada.”

Simard says that when Trump placed a 10 per cent tariff on aluminum mined in Canada back in 2018 demand remained the same.

“The metal kept going to the states, but the cost of the metal in the states went up tremendously,” he says.

Volpe says the pain will be felt on both sides by making the price rise on items that are manufactured in the United States, like cars and even airplanes.

“Peace is not going to come quick either. 2025 is going to be a tough year.”