The Stellantis plant in Brampton, ON could face some of the strictest tariffs.
The Stellantis plant in Brampton, ON could face some of the strictest tariffs. Credit: Unifor Credit: Unifor

As the U.S. prepares to slap punishing new tariffs on a wide-variety of Canadian goods on August 19, claiming Canada’s counter-tariffs last year as the justification, the White House now overlooks the fact that Donald Trump initiated this escalating tit-for-tat in the first place. 

But misinformation is the fog of this trade war.

One thing is nevertheless clear: whether the new tariffs negotiated this week end up being 15 per cent or 25 per cent or 50 per cent, their effects will mark the next chapter for a whole series of Canadian industries that no longer count on free trade as a baseline for business in North America. And the industry facing the most complex set of entanglements when the new tariffs go into effect is undoubtedly the auto sector. 

This is because no industry demonstrates the cross-border integration of manufacturing and sales in North America better than the car business. And nothing shows this interconnectedness more than the odyssey that car parts currently travel as they get assembled across the U.S., Mexico and Canada. 

In other words, it’s the industry with the most integration between the three countries that will now suffer most in this new era of disintegration. 

The White House has made clear that its interests are to disrupt the North American assembly line, and to bring auto manufacturing jobs back to the United States. 

“They’ve crafted a tariff policy for Canada that is designed to frustrate the business model of building cars in Canada,” said Angelo DiCaro, Research Director at Unifor, Canada’s largest private-sector union, which represents the country’s auto workers. “They’re putting tariffs on finished vehicles, but they’re not tariffing the US content of those cars.” 

The position is unapologetically U.S. centric. 

Canadian parts going into a car that is assembled in Canada for sale across the border would face a tariff. Car parts that originate in Canada, and get sent to a U.S. factory to be put into a so-called “American” car, would, by contrast, face no such tariff.

An engine, for instance, built in Ford’s Essex Engine Plant located in Windsor, ON would face no tariff, as long as the engine gets assembled into a car at an assembly plant in the United States. Ford recently committed a $700 million investment to the Windsor engine plant during collective bargaining with Unifor in July. 

The Stellantis N.V. vehicle assembly plant in Brampton, ON on the other hand, which normally assembles finished vehicles, would be subject to the strictest tariffs, and is now on the verge of a total shutdown and a reported potential selloff.

The Stellantis plant, formerly a Chrysler assembly line, began retooling to build a new generation of the hybrid Jeep Compass SUVs in 2024, until Stellantis cancelled the retooling and moved manufacturing to Belvidere, Illinois, which was largely seen a concession to Trump. 

This has left over 2,200 people out of work so far, according to Vito Beato, the president of Unifor local 1285, which represents over 8,000 workers in Brampton. 

“There’s a lot of stuff working against us,” said Beato. “We have tariffs definitely working against us.” 

Speaking about the communities that have been affected by the loss of work, Beato said that although many furloughed workers have been receiving 70 per cent of their wages, thousands of workers and many others in the community have lost their livelihoods.   

“And they don’t deserve this ’cause all they’ve done is worked their butts off and provided profits for these corporations, “ he said. 

The General Motors CAMI Assembly plant in Ingersoll, ON, has also been sitting idle, since GM canceled the BrightDrop program due to low demand for the electric delivery van. This CAMI assembly plant is Canada’s first full-scale electric-vehicle manufacturing plant, and despite Unifor now entering pattern bargaining with GM, the CAMI plant’s future remains uncertain, as well. 

Global manufacturers overtake the North American supply chain 

Even before Trump started his quixotic campaign to tariff the North American vehicle supply chain out of existence, the presence of the Big Three – Ford, GM and Stellantis (Chrysler) – in Canada had already been in a decade-long structural decline. 

In 2016, Canada assembled 2.3 million vehicles, and by 2025, it was only assembling 1.2 million. 

While the decline in manufacturing of “American” cars in Canada has indeed been dramatic, more than 75 per cent of the cars built in Canada are now made by Honda and Toyota. In fact, these two Japanese manufacturers employed more than 60 per cent of the country’s vehicle assembly plant workers in 2025. Neither of them are unionized, and since 2024, both companies have built more cars in Canada than the Big Three combined. 

This tells a broader story about the trend in the global auto business, the falling market demand for 

U.S. cars in Canada, and perhaps the closing chapter of tariff-free manufacturing that began with the Automotive Products Trade Agreement – the auto pact signed by President Lyndon Johnson and Prime Minister Lester B. Pearson – from 1965. 

Initially, the Auto Pact was designed to fix a diverse but disorganized Canadian auto industry, which was producing a multitude of different cars in Canada but not finding commercial success because of a wide-range of inefficiencies. U.S.-based companies were operating in Canada but productivity was around 60 per cent of the U.S., and the agreement sought to resolve this. 

Once the agreement was signed, it eliminated tariffs, integrated the Canada-US production network, and set the two countries on the path to free-trade. The auto pact was so successful, that by the time the World Trade Organization was founded in 1995, the pact was determined to have created an unfair advantage to its participants and was dismantled as a result. 

By the 1990s, the Japanese auto industry had long entered the North American market and although it was initially cut out of the auto-pact, subjecting Japanese cars to higher tariffs, the 1994 North American Free Trade (NAFTA) agreement replaced the Auto Pact and provided a level playing field for all manufacturers building cars on the continent, including Honda and Toyota. 

When NAFTA was replaced by CUSMA in 2018, during Donald Trump’s first presidential term, many assumed that the deal would be an extension of the free-trade policy that, for decades, intertwined business across North America. 

But since the CUSMA review period that began this past Spring, this is no longer the case. 

And so from this week on, the auto industry, along with dairy, lumber, steel, aluminum, alcohol and electronics are set to become continuing fronts in Trump’s trade-war, which means that any number of corporate and commercial casualties are likely to get caught in this expanding economic conflict.

Evan Wexler

Evan Wexler is a veteran journalist covering politics, technology and economic affairs. His work has appeared on the Intercept, The New York Times, PBS Frontline and elsewhere. He has reported extensively...