Canadian auto sector endorses plan to retaliate against ‘schoolyard bully’

Representatives of the Canadian auto industry said Thursday they will support Canada’s plan to retaliate in a “proportional manner,” if the United States imposes tariffs on imports of automobiles and vehicle parts.

Canada’s deputy ambassador to the United States Kirsten Hillman urged a U.S. Department of Commerce panel gathered in Washington to “recognize the wide range of benefits of an integrated North American economy.”

“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 said.

Jerry Dias, president of autoworkers union Unifor, and Flavio Volpe, president of the Automotive Parts Manufacturer’s Association, backed the federal government’s stern warning that it would impose retaliatory tariffs in the same way it did after the U.S. government levied steel and aluminum tariffs.

The two compared the trade scenario to a school bully trying to steal lunch money on the playground.

“They absolutely need to do this. If the schoolyard bully takes your lunch money on the first day of school, you better fight back or you’re going to be hungry all year,” said Dias. “We don’t have any choice. If he’s going to slap tariffs on vehicles and auto parts, we’re going to have to retaliate in the same way. There’s just no other way.”

Volpe said that he would have been “disappointed” if Canada had not indicated it would retaliate to the potentially hefty tariffs.

U.S. President Donald Trump initiated a Department of Commerce investigation to determine the national security effects of imports of automobiles and automotive parts under Section 232 of the Trade Expansion Act of 1962, the same legislative move used to impose steel and aluminum tariffs.

On Thursday, representatives of the automotive industry and government officials from around the world urged the Department of Commerce to reject the imposition of tariffs against the highly integrated industry. There has been limited, if any, major support in favour of the tariffs.

While the arguments presented were not unexpected, Volpe said it marked a central moment that allowed the industry to warn the government of the impacts of such tariffs.

“It’s good to see American voices saying the same things that Canadian voices are saying,” Volpe said in an interview. “Every single major player in the automotive sector on both sides of the border and in Mexico have said ‘this is dumb, we didn’t ask for this protection’.”

Several reports published since the Section 232 investigation was announced have echoed the sentiments that were repeated at the hearing.

A new report released by the Centre of Automotive Research on Thursday said that 25-per-cent tariffs would send the price of new vehicles sold in the U.S. soaring by up to nearly $7,000.

And those higher prices won’t exclusively hit new vehicles, according to the report.

“Higher new car prices will drive some consumers into the used vehicle market, where prices will also be higher due to heightened demand and constricted supply,” the report said.

“Higher automotive parts prices are also likely to drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.”