If Donald Trump follows through on threats to slap tariffs on cars made in Canada, the result would be “devastating” for the auto industry in both countries.
Prime Minister Justin Trudeau made that comment in an interview with Global News Radio in Winnipeg on Tuesday as his foreign minister, Chrystia Freeland, arrived in Washington to push forward on trying to secure a new NAFTA deal.
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“Well, we know that if the president were to move forward with his punitive tariffs on cars that he’s threatened, it would be devastating, obviously, to the Canadian auto industry, but it would also be devastating to the American auto industry,” Trudeau told Lauren McNabb, Brett Megarry and Greg Mackling at 680 CJOB/Global News Radio.
“It would cause a massive disruption and I think lots of layoffs in the United States. I think it’s something that we obviously have to be aware the president is contemplating.”
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Just last week, Trump publicly mused about the impact a tariff on auto manufacturers would have on Canada.
READ MORE: Trump says auto tariffs would be ‘ruination’ of Canada
He made the comments in reference to ongoing trade talks taking place in Washington, saying he wants to try to cut a “fair deal.”
However, he suggested he could view the use of such tariffs as leverage in negotiations.
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“I don’t want to do anything bad to Canada. I can — all I have to do is tax cars — it would be devastating,” he said.
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Earlier this year, Trump imposed steep new tariffs on steel and aluminum from Canada as well as a number of other countries including Mexico.
His trade representative, Robert Lighthizer, has said those tariffs of 25 per cent and 10 cent respectively would be lifted if Canada and Mexico capitulate to U.S. demands during NAFTA negotiations.
Canadian officials, on the other hand, have repeatedly said they do not view the steel and aluminum tariffs as being linked to NAFTA talks and condemned the application of them under American national security rules, which describe Canadian steel and aluminum as a threat to America.
READ MORE: Canada has made almost $300M from retaliatory tariffs on U.S.
It’s expected the threatened auto tariffs would be applied using the same legal mechanism.
On July 1, Canada imposed retaliatory tariffs worth $16.6 billion on a wide range of U.S.-made goods including dozens of steel and aluminum products.
So far, the Canada Border Services Agency has collected about $300 million worth of surtaxes as a result of those tariffs.
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