Canada firm leery of U.S. border tax

AURORA, Ontario — North America’s largest autoparts maker said a border adjustment tax being studied by President Donald Trump would increase the odds that future factories will be located in the U.S.

But Canada’s Magna International Inc. said the growth of “protectionist sentiments” could hurt its operations and profitability, as well as the entire automobile industry, according to a company statement Friday. The manufacturer is closely watching a potential tax overhaul in the U.S., Chief Executive Don Walker said during a conference call with analysts and investors.

“The industry as a whole is trying to get all the facts to the right people so at least they understand what the impact might be,” Walker said. “The latest I understand is that the difference between Canada and the U.S. as far as trade is concerned really isn’t an issue. Having said that, any border adjustment tax I think would be negative for the whole industry.”

The maker of bodies and chassis, car electronics and vision systems relies on the U.S. for about one quarter of its sales, and counts on Mexico for another 12 percent. In a meeting with Trump on Thursday, U.S. manufacturers pressed their case that a tax on imports would lead to higher domestic employment. While Trump discussed the potential benefits of such a measure after the discussions, he stopped short of endorsing the proposal.