General objectives that guide the activities and relationships of one state in its interactions with other states.

Car Tariffs threaten Canada’s motor industry

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Thanks to Donald Trump, the latest US auto tariffs are going to deal a punishing blow towards Canada’s car industry. The country currently produces around 2 million vehicles on an annual basis and now the tariff is set to rise by as much as 25%, it is thought that these figures will soon be more than halved. The added cost is going to through the car making industry into chaos as profits are going to virtually disappear for many of the major players.

Threats

Ever since Donald Trump came into office, pretty much all of his promises have become reality. That is why it looks as if this one is going to be the beginning of the end for Canada’s car export business. After all, who would want to pay 25% extra for a car when you can have the home grown version for much less? There’s also thought to be a 10% tariff for car parts and that will also be cause for major concern throughout the industry. The thinking behind the tariff is to bolster the ailing US car industry and that is one of the reasons that Trump was voted into power. He promised to help the US economy get back to their best no matter what it takes.

Job losses

So exactly home many jobs are we talking about here? Well, if the figures are to be trusted, something around the 160,00 mark are going to be affected. If Trump goes ahead with another promise, the same tariff on all imported cars, it is thought that Canada’s production will drop to an even more serious 400,000 vehicles per year.  It is believed that if Canada decides to retaliate in kind, even more jobs could be hit as a result.

Home grown

The facts are there for all to see, currently around 80% of the US’s cars are built there. So it is thought that they typical driver will not care on fig about the knock on effect that Trump’s actions will create north of the border. Production plants will simply have to close their doors and this will no doubt have a negative effect on the Canadian GDP. He’s going to be doing the same to car imports from Asia and the Eu so it isn’t going to be good news for those regions either. But for Trump, so long as the US is doing fine, he will be a happy president.

No idle threat

Trump made this announcement whilst en-route to the G& summit in Singapore and it wasn’t very long before the news made its way to Canada, the Eu and the rest of Asia. Perhaps this was the result of President Trudeau’s assertion that his country would not be ‘pushed around’ by the US, who knows?

What we do know is that Trump has proven so far to be a man of his word and that looks pretty bleak for the Canadian motor industry. Whether he goes ahead with these plans will be revealed very soon indeed.



As one of the founders of foreignpolicyi.org Knjaz Milos tries to bring all the latest news regarding politics. He loves history and is passionate about writing. contact: carsoidoffice[at]gmail.com

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