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 U.S. auto plants.Chris Young/The Canadian Press
The head of auto parts maker Martinrea International Inc. is confident that U.S. tariffs on Canadian-made cars will not survive the next round of negotiations to renew the U.S.-Mexico-Canada free-trade agreement.
Rob Wildeboer, executive chairman of Vaughan, Ont.-based Martinrea MRE-T, said Canadian negotiators at next year’s review of the continental agreement should be able to get rid of U.S. President Donald Trump’s 25-per-cent tariffs.
The tariffs are opposed by Detroit-based automakers, who say they will cost the companies billions of dollars this year alone. U.S. industry experts say the taxes – applied on all imported passenger vehicles – are driving up car prices, and will reduce auto production and employment.
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Mr. Wildeboer, in an interview and at a panel hosted by the Canadian Club in Toronto on Wednesday, said he is in frequent contact with U.S. trade officials and has spent time recently at the White House.
He said he has learned the U.S. is concerned with three areas in its trade with Canada: USMCA rules on auto parts’ country-of-origin; Canada’s supply managed dairy and other agricultural sectors; and the digital services tax.
“Those are the three pinch points for the Americans,” Mr. Wildeboer said. “So I think if you’re in a negotiation, you deal with those three things, then you’ll find the auto tariffs go away.”
Mr. Trump imposed the tariffs in April as part of what he says is a bid to revitalize U.S. manufacturing and create jobs. He accuses Canada and other countries of “ripping off” the U.S., wrongly conflating trade deficits with subsidies.
Canadian-made cars exported to the United States face 25-per-cent tariffs, reduced by the proportion of their U.S. content. Canada has applied similar import taxes on U.S.-made vehicles, with exemptions for domestic content and the importer’s manufacturing footprint. Canadian-made auto parts are exempt from U.S. tariffs.
Mr. Wildeboer, who leads a company that employs 19,000 people at 56 auto parts factories around the world, including Canada, the U.S. and Mexico, said the tariffs upended an industry that is the world’s most integrated supply chain. Until the tariffs arrived, crossing the Canada-U.S. border was no different than crossing state lines.
This efficiency, built on decades of free trade, has allowed Martinrea and its Canadian rivals – Magna International and Linamar Corp. – to become multibillion-dollar companies with record profits, he said.
The tariffs put this at risk. He described the U.S. trade policy as “incoherent.”
Mr. Wildeboer said he had to explain to U.S. trade officials during his recent trips to the White House that tariffs would shut down the auto industry – including U.S. plants.
“I don’t think they understood manufacturing supply chains,” he said, adding, “I think we’re going to get to a better place. People need vehicles. They need parts. They need really good suppliers.”
In any case, his own experience hiring at Martinrea has underlined that the U.S. does not have a skilled work force big enough to enable manufacturers to bring home all the auto jobs outsourced to Mexico, Canada, China and other places, he said.
Although Mr. Trump is driving the tariff agenda, Mr. Wildeboer said Jamieson Greer, the U.S. trade representative who will be at the USMCA table, is aware of the Canada-U.S. trade relationship and what’s at stake. “He’s a smart guy. He knows the facts. He knows that there isn’t a trade deficit on autos between the U.S. and Canada.”
Still, Flavio Volpe, who is head of the Automotive Parts Manufacturers’ Association and represents Canadian suppliers, said the path to getting rid of tariffs is not clear. The levies threaten an industry that has recovered from pandemic supply disruptions and was set to enjoy years of good times, evidenced by multibillion-dollar investments in Ontario plants, he said.
The U.S. tariffs, imposed in a “chaotic” fashion, have made it hard for the multinational investors to plan.
“It’s unprecedented,” Mr. Volpe said at the Canadian Club event. “We don’t have a negotiating table. I honestly don’t know what the next step is.”