Canadian automotive executives are assessing U.S President Donald Trump’s latest threats and Twitter tirade directed at the Canadian auto industry.
Trump took more swipes at Canada and Prime Minister Justin Trudeau after leaving the Group of Seven Summit early on the weekend.
In tweets, Trump insulted Trudeau as "dishonest" and "weak."
"PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, 'US Tariffs were kind of insulting' and he 'will not be pushed around.' Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!" the U.S. president tweeted.
In his press conference, Trudeau had spoken of retaliatory measures that Canada would take next month in response to Trump's decision to slap tariffs on steel and aluminum imports from Canada, Mexico and the European Union.
“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!”
Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association said he and the automakers his association represents,are “going to take some time to reflect over this.”
“We’re all trying to take stock over what transpired this week. We’re going to have some discussions today amongst ourselves to discuss this,” he said.
While Nantais and officials from CVMA member companies — FCA, GM and Ford — were meeting Monday, the association hasn’t schedule meetings with Canadian government officials any time soon.
In 2017, the Detroit Three automakers produced 1,177,311 vehicles in Canada, according to the association’s website.
“Over 90 per cent of what we build in Canada is shipped to our primary customer, the U.S.,” Nantais said. “If people are getting slapped with a 25-per-cent tariff, or whatever the tariff may be, and that’s a vehicle they want to purchase, obviously that’s going to be an issue for consumers in the United States. These are things that people in a highly integrated market need to think through.”
In 2017, Honda and Toyota combined to build 1,009,203 light vehicles in Canada. Of those, about 764,141 were exported to the United States, the Japan Automobile Manufacturers’ Association said.
David Adams, head of the Global Automakers of Canada, said the rhetoric coming out of the G7 Summit “hasn’t been all that good or helpful.
“It was a lost opportunity to make progress on NAFTA and other trade issues,” Adams said.
The Global Automakers of Canada represents before all levels of governments the interests of its members engaged in the manufacturing, importation, distribution and servicing of light duty vehicles.
CANADA'S MIX OF VEHICLES
A snapshot of Canadian vehicle production shows that FCA’s Windsor Assembly Plant is the only factory that produces the Chrysler Pacifica, the automaker’s flagship minivan.
Meanwhile, GM’s CAMI plant in Ingersoll, Ont., produces the Chevrolet Equinox, a popular utility vehicle in the United States. And Toyota Toyota Motor Corp. announced earlier this year it will spend $1.4 billion upgrading two of its three Ontario assembly plants to build the next generation of the RAV4 crossover vehicles, also popular in the United States.
“Clearly it’s not a good situation getting hit with a 25-per-cent tariff. It doesn’t make a heck of a lot sense. American consumers are going to have to pay more.” Adams said. “We’re better positioned with the product mix we have than if we we were producing passenger cars. If you look at where the sweet spot of the market is…yeah, Canada is well positioned.”
But, he added: “The end game is pretty clear.
“The president wants more vehicles produced in the U.S. and presumably not as many in Mexico or Canada,” he said. “It doesn’t pave the road for a beneficial trading relationship.”
Nothing is guaranteed, of course. Back in January, at the Detroit auto show, FCA CEO Sergio Marchionne had a warning about tariffs.
”It's a combination of tariffs and costs," he was quoted by the CBC as saying. "If we just can't recover the costs of the vehicle that would be lethal, I think, to Windsor."
GM could also move its Equinox production — something it threatened to do during a prolonged strike in 2017.
Unifor leader Jerry Dias said during a strike back in September that GM officials told the union they would ramp up production of the vehicle at two plants in Mexico that build the Equinox and a similar model, the GMC Terrain, if the strike didn’t end. The job action lasted about four weeks.
The Trump administration announced two weeks ago that it would investigate whether auto imports hurt U.S. national security, the first step toward tariffs similar to the ones he imposed on steel and aluminum imports last week.
ALL ABOUT 'PRICE OF MILK?'
Earlier on Saturday, Trump told reporters it would be "very easy" to make the case for tariffs on auto imports using the rationale that they threaten national security.
"It's economic. It's the balance sheet. To have a great military, you need a great balance sheet," he said.
Reacting to Trump's weekend tweets, Trudeau's office said: "We are focused on everything we accomplished here at the summit. The primeminister said nothing he hasn’t said before — both in public, and in private conversations with the president."
Flavio Volpe, head of the Canadian Automotive Parts Manufacturers' Association fired back at Trump on Twitter.
"So.... you’re suggesting using a National Security regulation to charge $8B in tariffs to *American* consumers who buy 1 million cars made by American automakers, containing 60% American parts content, because of the price of milk in Windsor [Ontario]? Where do I start?"
Reuters contributed to this report.