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Ontario Premier Doug Ford said Thursday he was told by U.S. Secretary of Commerce Howard Lutnick this week that Canadian-made vehicles with 50 per cent or more American parts will not face the tariffs set to hit all imports into the United States next week.

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U.S. President Donald Trump signed an executive order Wednesday to impose 25 per cent levies on all automobile and auto part imports — his latest move to upend global trade through a massive tariff agenda that has rattled American allies around the world.

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Lutnick called Ford late Wednesday night to say that Canada would face a different rate — but the provincial government still doesn’t know when Canadian vehicle production might see a tariff break.

Ford said it was a productive conversation and Lutnick “knows how integrated the auto trade is” between the two countries.

“A lot of the automobiles that are manufactured here in Ontario have 50, 60 per cent parts from the U.S. going back and forth,” Ford said Thursday. “The good news for the auto part manufacturers, they aren’t going to be touched, which is very, very important.”

Ford said he wants to wait to respond to the latest tariffs until after April 2, when Trump is set to implement what he calls “reciprocal” tariffs by raising U.S. duties to match the tax rates that other countries charge on imports.

The Canada-U.S.-Mexico Agreement on trade, also called CUSMA, was negotiated during the first Trump administration to replace the North American Free Trade Agreement. It boosted rules requiring that a majority of parts in an automobile be North American in order for the vehicle to be tariff-free.

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Trump praised CUSMA at the time it was negotiated as the “best agreement we’ve ever made” — but experts say his expanding tariff assault on Canada and Mexico is undermining the trade pact. The agreement is up for mandatory review in 2026 but few think Trump will wait to start negotiations.

Trump signed the executive order Wednesday to implement duties on automobile imports starting April 3. A fact sheet provided by the White House said automobiles imported under CUSMA will only be tariffed on the value of content not made in the United States.

Ford said it appears that Canadian vehicles with less than 50 per cent U.S. parts will be subject to those tariffs.

The executive order also imposes tariffs on certain auto parts, including engines, transmissions and electrical components. The White House fact sheet said automobile parts under CUSMA will not be tariffed until Lutnick, in consultation with U.S. Customs and Border Protection, creates a process to identify non-U.S. content.

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Trump’s latest move is likely to sow more confusion in the North American automotive sector — a continental industry that sends vehicle parts across borders multiple times before final assembly.

Trump’s growing global trade war pushed some automakers’ stock prices down on Thursday as rattled markets struggled to anticipate the president’s next trade moves.

Trump posted on social media that if “the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!”

The European Union and Canada have not issued statements suggesting they’re collaborating on a response to the new tariffs.

Prime Minister Mark Carney interrupted his election campaign Thursday and returned to Ottawa to lead a meeting of the Canada-U.S. relations cabinet committee. Carney has called the auto tariffs a “direct attack” on Canadian autoworkers and has promised swift action and support.

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Trump moved forward earlier this month with 25 per cent tariffs on all steel and aluminum imports to the U.S., including Canadian products.

He also launched — then partially paused — economy-wide tariffs against Canada and Mexico. It’s not clear whether those sweeping tariffs, which Trump has linked to the flow of fentanyl, are set to return next week.

Trump has said his tariffs are aimed in part at compelling companies to manufacture goods in the U.S. Manufacturers and experts have said redistributing the North American automobile industry would not be easy or quick.

“The result is higher costs for manufacturers, price increases for consumers, and a less competitive industry,” Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, said in a media statement.

“We continue to urge all parties that all (CUSMA)-compliant parts, components, and vehicles be free of tariffs under that agreement.”

The tariffs will be felt across the American supply chain, said MichAuto executive director Glenn Stevens Jr.

“This means jobs lost, increased input costs and pressure on the balance sheets of companies large and small,” said Stevens Jr., who represents the automobile sector in Michigan.

“Companies that export vehicles and parts to the U.S. will need to make decisions on whether existing facilities in the U.S. have capacity or can be expanded.”

This report by The Canadian Press was first published March 27, 2025.

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