The Trump Administration could impose an automotive tariff on Canada

The President of the United States, Donald Trump, has threatened to impose a tax on imported vehicles.

The automotive tariffs would leave huge repercussions for Canada’s car industry as one of the largest importers to the country, Bloomberg reported.

The proposed tariffs are seemingly becoming more likely as Trump has called Canada’s Prime Minister, Justin Trudeau, ‘Very dishonest & weak’ whilst accusing him of ‘bad faith diplomacy’.

“I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” the President tweeted.

SEE ALSO:

• How can manufacturers secure their supply chains in the wake of Brexit and Trump?

• How might Donald Trump affect US-UK trade?

• Ford pulls Mexican plant plans in the wake of Trump tax threats

• Read the latest issue of Manufacturing Global here

The US Commerce Department is currently reviewing vehicle imports in regards to national security, under Trump’s instructions.

If the tariffs are implemented, they will be applicable to all countries, including the US’ largest imports – Mexico and Canada.

“I think we are all sitting with bated breath hoping that cooler heads prevail, but most of us believe there’s an equal chance that they won’t,” commented Dennis DesRosiers, President of DesRosiers Automotive Consultants, Bloomberg noted.

Vehicles and vehicle parts accounted for 16% of Canada’s CAD$7.4bn (US$5.7bn) of shipments in the first fourth months of 2018.

The industry is the nation’s second largest exporter, following energy.