Possible softening of April 2 tariffs 'zero comfort' for auto sector

Auto sector still anxious

Photo: The Canadian Press

An employee works on the production line at the Martinrea auto parts manufacturing plant, in Woodbridge, Ont., on Monday Feb. 3, 2025. The site supplies auto parts to both Canadian and US auto plants. THE CANADIAN PRESS/Chris Young

Just over a week before new U.S. tariffs are expected to come into force, the head of Canada’s auto parts manufacturing association says he’s not optimistic any meaningful reprieve is in the works.

"Until a tariff comes into effect and it affects the U.S. economy ... I'm not confident that anybody is going to be able to push the White House back from what it's threatening to do," said Flavio Volpe, president of the Automotive Parts Manufacturing Association.

April 2 is set to bring sweeping new reciprocal tariffs from the U.S. in addition to the tariffs on some Canadian and Mexican goods that were delayed by a month. U.S. President Donald Trump had also floated the idea of separate, sector-specific tariffs the same day.

But over the weekend, media reports suggested the reciprocal tariffs could be narrower than initially announced and that the sector-specific tariffs could be off the table for now.

However, Volpe said that with all the layers of tariffs and the stream of new announcements and threats, the reports aren't cause for optimism.

"The fact is, the president has threatened multiple layers and types of tariffs on Canada and specifically for the auto sector, and the idea that they may be willing to put some off, while still talking about putting a universal tariff on Canadian goods on April 2 is zero comfort," he said.

Volpe was in Washington, where he was conducting meetings with various departments and congressional representatives — but getting no clarity.

For industries that rely on exports to the U.S., tariffs could be a major hit as customers south of the border may choose to buy fewer goods or switch to U.S. alternatives.

Volpe said Trump is putting the auto sector, which is deeply integrated across the U.S. and Canada, at risk.

"He's putting the future of General Motors and Ford at risk," said Volpe, whose association represents the companies that supply the automakers.

Earlier in March Trump enacted tariffs on steel and aluminum, prompting a second round of retaliatory tariffs from the Canadian government.

Retaliatory tariffs are also an issue for Canadian businesses and consumers as they raise the prices on goods coming from the U.S.