Canada warns U.S. against auto tariffs

OTTAWA — The federal government has sent a blunt warning to the Trump administration: if it slaps Canada with auto tariffs, Canada will hit back.

Canada’s deputy ambassador to the U.S. delivered the message Thursday in Washington during testimony at U.S. Commerce Department hearings. The department is investigating whether duties should be applied based on the premise auto imports pose a national security risk to the U.S.

Putting levies on the highly integrated, economically critical North American auto industry and its supply chains would lead to large-scale layoffs on both sides of the border, numerous experts have argued.

The talk of auto tariffs comes at a time when the next-door neighbours are already engaged in an unprecedented trade dispute.

In June, the Trump administration imposed tariffs on steel and aluminum imports. The move prompted Canada to retaliate with reciprocal duties of its own on imports of the metals from the U.S., as well as dozens of other consumer products.

Kirsten Hillman, Ottawa’s envoy to Washington, insisted Canada will strike back again, if necessary.

“Should this investigation ultimately result in the application of tariffs on autos, Canada will once again be forced to respond in a proportional manner,” Hillman told the hearings.

“Maintaining open trade in autos and auto parts between our countries is crucial to the economic well-being of our companies, our communities and our workers, which, in turn, supports our collective security. We urge you to reflect on these matters as you prepare your recommendations.”

Canada’s warning came the same day the European Union announced it was prepared to launch retaliatory measures against the U.S. if President Donald Trump introduced auto tariffs.

Trump has proposed tariffs of 25 per cent in a decision he insists would help American workers. His administration has expressed concerns that, for decades, foreign imports have eaten away at the U.S. auto industry.

Hillman rejected the idea that Canada could represent a risk for U.S. national security. She argued that American contingency planners have long considered Canadian industrial centres as key sources of reserve capacity in the event of an attack on the U.S.