Detroit automaker group pushes back on tariffs as Ottawa takes tougher stance

The lobby group behind the Detroit Three automakers says the Canadian government is making a mistake by charging tariffs on some U.S. vehicle imports, a decision that has the support of Canadian labour and industry leaders.

The federal government said last week it would limit how many vehicles Stellantis and GM can import tariff-free after both companies announced cuts to their planned production that leave thousands of Canadian out of work.

In April, Ottawa gave exemptions on retaliatory tariffs to some automakers as long as they maintained Canadian jobs and investments, but because of the production cuts the government has reduced how many vehicles Stellantis can import tariff-free by 50 per cent, and for GM by 24 per cent.

The decision, however, makes it harder for the automakers to invest in Canada at a time of immense pressure on the industry, said Brian Kingston, head of the Canadian Vehicle Manufacturers' Association.

"We are trying to do everything possible to protect this footprint, to keep jobs here in Canada, and now the government doubling down, putting further tariffs on manufacturers, doesn't help," said Kingston.

He said the government needs to work with industry to make Canada competitive, while policies like the EV mandate and more recent moves directly against the companies aren't helping.

"With the measures that are being taken today, plus threats of legal action, it is increasingly challenging to see a world in which companies want to invest here."

The government moves came after Stellantis previously said it was moving production long-planned for its plant in Brampton, Ont., to Illinois, along with the more than 3,000 jobs that go with it.

Then last week, General Motors announced it would not be restarting electric delivery van production at its plant in Ingersoll, Ont. as planned in November because of low demand. The plant employed more than 1,000 workers before it was idled in May.

The decisions have led labour leaders including Unifor national president Lana Payne to call for a tough response, including using the tariff lever, to counter the pressure being exerted by U.S. President Donald Trump.

"We can't negotiate from our knees. We need to fight back. We can't remain silent while we are bleeding jobs, and our workers and industries are under attack by unjust and punitive tariffs," said Payne in a statement.

Flavio Volpe, president of the Automotive Parts Manufacturers' Association, said that given Stellantis imported about 130,000 vehicles last year, the government's tariff move could mean hundreds of millions of dollars in charges for the automaker.

"That's how you get somebody's attention. That's how you put pressure on a decision-maker to change their decision."   

He said he understands the tough balance automakers are trying to make, but that Canada didn't start this fight and companies have to decide who they're siding with.