Trump's Tariffs Devastate Canada's Auto Sector as Thousands Face Layoff Risks | Carscoops

      Some Canadian suppliers will be more affected by the tariffs than others.

      Just recently, Unifor President Lana Payne announced that there would be 6,000 short-term layoffs. Stellantis has also halted production at its Ontario facility for two weeks.

      Trade wars are resurfacing, and Canada's automotive industry is already experiencing the impact. Although President Donald Trump declared a 90-day suspension on his so-called “reciprocal” tariffs for various countries, Canada is not among those receiving relief. The separate 25% tariff on automobiles introduced weeks prior remains in effect.

      As these duties continue to pressure Canada, the leader of the country's largest private-sector union, Unifor, warns of potential long-term damage to supply chains.

      Shortly after President Trump announced his new 'Liberation Day' tariffs on April 2, around 6,000 Unifor members received temporary layoff notices, mainly from Stellantis' Windsor, Ontario facility. The automaker quickly declared a two-week shutdown to evaluate its next steps.

      The greater concern, however, lies not in the immediate effects but in what may follow. Unifor President Lana Payne is clearly preparing for further challenges.

      “The industry cannot sustain these types of tariffs. The longer this situation persists, the greater the repercussions we will face,” she stated to Bloomberg. “I worry that temporary layoffs may evolve into longer-term ones. We've already received early warnings from auto companies to their workers that depending on the duration of this situation, we might encounter wider layoffs across the parts sector.”

      In retaliation for Trump’s tariffs, Canada implemented its own 25% counter-tariffs on vehicles imported from the US. These measures specifically target cars that do not fulfill the content guidelines outlined in the United States-Mexico-Canada Agreement, particularly those incorporating parts from outside North America.

      Payne noted that some Canadian suppliers will experience a disproportionate impact from the new tariffs.

      “Not all suppliers face the same economic challenges; some are quite vulnerable,” she informed Bloomberg. “However, in many areas of this sector, if a supplier must bear even a fraction of these tariffs, it may not be able to continue operations.”

      The consequences could reach far beyond individual facilities, jeopardizing the stability of an already strained North American supply network.