Ontario should trade car assembly for auto parts to avoid a costly trade war
The author argues that protecting foreign-owned vehicle assembly in Ontario is futile and suggests focusing on the Canadian-owned auto-parts sector instead.
Ontario’s auto-assembly plants, largely owned by foreign manufacturers, have fallen from over three million vehicles in 1999 to about 1.2 million in 2025, and their share of Canadian production has dropped to under a quarter. Premier Doug Ford’s push to preserve these jobs overlooks the sector’s dependence on tariff-free U.S. market access, which could be jeopardized by potential American tariffs of 15-50 percent. Meanwhile, the Canadian-owned auto-parts industry employs roughly 71,400 workers and contributes $11.3 billion to GDP, outpacing assembly’s $7.8 billion.
The author suggests that Canada could accept high tariffs on imported cars, effectively ending domestic assembly, while negotiating duty-free treatment for its parts, thereby protecting the more valuable, home-grown segment. This approach would align with Prime Minister Mark Carney’s call for greater economic independence and avoid costly subsidies for foreign carmakers.
Why it matters
It highlights a strategic shift that could preserve Canadian jobs while reducing reliance on foreign car manufacturers.
How this story developed
- Aug 21 Trump announces 90-day tariff waiver for up to 300,000 tonnes of ground beef
- Aug 25 Canada announced a domestic loan and benefit package while the United States moved to impose 50% tariffs on Canadian auto goods.
- Aug 25 Canada is preparing a counter‑tariff schedule to be unveiled in early September.
- Aug 25 Canada announced retaliatory tariffs to begin on Sept 8.
- Aug 26 Trump defended the tariff pause amid growing Republican criticism.
- Aug 26 Retailers have begun removing U.S. wines and spirits from shelves as part of the boycott campaign.
- Aug 27 The United States began reviewing possible bans on Canadian imports under Section 338.
- Aug 27 Trump signed a proclamation implementing the 90‑day tariff waiver.
- Aug 28 President Trump pledged to overhaul federal regulations that limit farmers and ranchers from processing their own meat.
- Aug 29 Canada set a 25% levy on certain American vehicles and matched the U.S. 50% level on steel and aluminium, also targeting plywood, screws and other timber items.
- Aug 31 Trump urged Canadian firms to relocate to the United States and labeled Canadian leadership the worst he has encountered.
- Aug 31 Mark Carney described the dispute as an attack and said Canada must respond as if at war.
- Sep 1 Trump announced a 90‑day tariff waiver for up to 300,000 metric tons of imported lean beef trimmings.
- Sep 3 USDA announced plans to fund small and midsize meat‑packing operations.
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