Tariffs on Canadian goods and services are beginning to impact U.S. automakers and parts suppliers who face potential disruption to the deeply interconnected North American automotive supply chain. The 25% tariffs recently implemented on Canadian aluminum and steel—critical materials for auto parts—could become broader automotive sector tariffs by April 2.
According to BNN Bloomberg, industry experts warn that the highly integrated nature of U.S.-Canada manufacturing could lead to rapid production problems. "The way that we're integrated now, it means that in only a few days the supply chain can stop functioning," said Francois-Philippe Champagne, Canada's industry minister. He cautioned that American factories relying on Canadian components could soon face shutdowns.
Linda Hasenfratz, executive chair of Canadian parts maker Linamar, stated that combining metal tariffs with auto tariffs would "likely shut the industry down," with billions in losses for automakers on both sides of the border.
The tariff situation is already affecting U.S. automaker stocks. General Motors and Stellantis fell 11% ,while Ford has declined 9.5% since November 5. The trade tensions threaten to disrupt manufacturing processes that typically involve parts crossing borders multiple times during vehicle production—a system developed under decades of free trade agreements, including the USMCA signed in 2018.
