About 100,000 Canadians work in Canada’s auto parts manufacturing industry, including tooling jobs, while another 25,000 work in the auto assembly industry.Chris Young/The Canadian Press
The U.S. envoy to Canada held out hope Tuesday for the Canadian auto sector despite President Donald Trump’s talk of cutting it out of the American market.
Ambassador Pete Hoekstra told a Toronto audience that Canada may still be able to work together with U.S. automakers under an industrial strategy focused on the threat from Chinese vehicle makers.
The ambassador, a Trump appointee, was asked whether Canadians should be worried about the future of their auto and auto parts industry, which are almost entirely reliant on exports to the United States.
Mr. Trump, who has imposed tariffs on imported cars, including from Canada, has repeatedly said he does not believe Canada should be assembling cars for U.S. customers and that he wants factories in this country to relocate to the United States. “We don’t want cars from Canada,” he said in April.
Mr. Hoekstra said Tuesday Canadians need not worry.
“Our chief competitor is China,” he said, adding the questions in existing trade negotiations, including with Canada, are about how to build an industrial strategy focused on this.
U.S. Ambassador to Canada Pete Hoekstra.Sammy Kogan/The Globe and Mail
“How do we use the strengths of the U.S. auto industry, how do we use the strengths, the capabilities of Canada, and how do we bring those together in such a way that we’re beating China and not each other?” the envoy said.
He said it’s U.S. Commerce Secretary Howard Lutnick’s task to sort this out.
About 100,000 Canadians work in Canada’s auto parts manufacturing industry, including tooling jobs, according to Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. Another 25,000 work in the auto assembly industry, he said
In a normal year without U.S. tariffs, nearly half of auto parts production is exported, most of it to the United States. About 80 per cent of assembled vehicles are also exported to the U.S.
Mr. Volpe said he’s happy to hear Mr. Hoekstra say the U.S. wants to work with Canada on an auto strategy but he said the U.S. needs to drop its tariffs.
“The U.S. auto industry depends on Canadian capabilities. You can’t win with China if you’re fighting us,” Mr. Volpe said. “I am glad he said it out loud today, but it still doesn’t reconcile with American tariffs on Canadian-made vehicles.”
He spoke just before Mr. Trump signed an executive order Tuesday that raised U.S. tariffs on foreign steel and aluminum imports, including from Canada, to 50 per cent from the 25-per-cent rate set earlier this year.
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The U.S. envoy defended the steel and aluminum tariffs but suggested there may be a way the United States could be supportive of imports from Canada in the future.
Ontario Premier Doug Ford, who met with the U.S envoy Tuesday at Queen’s Park, said he was confident the two countries would land a new trade deal.
“I feel that we’re getting closer, that’s the positive news,” Mr. Ford told reporters. “I just feel that the conversations are getting very close hopefully to a real positive deal happening.”
But the Premier said he never expected Mr. Hoekstra to help waive tariffs on Canada’s auto, steel and aluminum industries: “At the end of the day, as the ambassador said, he doesn’t speak for the President, everyone feeds everything up to the President.”
Mr. Hoekstra has previously warned Ontario’s Premier and others to tone down their responses to Mr. Trump’s talk of tariffs and annexation threats. Mr. Ford said both sides agreed the temperature needs to be lowered.
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“The President has to tone it down, too,” Mr. Ford said. “We need to bring the temperature down, we both agree on that. But I have a job. My job is to protect the people of Ontario, protect their jobs, their communities and their businesses.”
Mr. Ford said he was concerned about the impact of the tariff escalation and accused the White House of breaking a promise it made with him when the Premier agreed to cancel Ontario’s short-lived 25-per-cent surcharge on exports of electricity to the U.S. in March after Mr. Trump had threatened to double his steel and aluminum tariffs in response.
He said the tariffs would prompt Ontario to move more factories, such as for the making of aluminum cans, to the province, instead of shipping raw materials to U.S. plants, harming American jobs. He said further retaliation was up to Ottawa and the other provinces, but that he said he supported matching U.S. tariffs on steel.
“We can’t be kicked around any longer,” Mr. Ford said.
The current U.S. levies on Canada are on steel and aluminum, as well as a 25-per-cent tariff on Canadian-made vehicles, which applies only to the non-U.S. content in those cars and light trucks. There is also a 25-per-cent tariff – which drops to 10 per cent on critical minerals, energy and potash – for goods that don’t comply with United States-Mexico-Canada Agreement rules of origin.