The ongoing uncertainty caused by U.S. President Donald Trump’s shifting tariff policies is forcing investments in key industries, including the automotive sector, to be put on hold, posing a significant risk to the Canadian economy, Unifor National President Lana Payne has warned.
Her remarks followed the White House’s decision on Tuesday to maintain the existing 25% tariffs on steel and aluminum despite Trump’s earlier threats to double them. The sudden reversal is the latest in a series of tariff announcements that have created instability for Canadian businesses.
Impact on Canadian Industry
Payne, whose union represents workers across multiple industries, including steel and aluminum, criticised Trump’s unpredictability, stating that his actions have real-time consequences for both Canadian and American workers. She stressed that continuous uncertainty discourages businesses from making necessary investment decisions, particularly in manufacturing and resource sectors.
“Companies have to make investment decisions every year—whether to upgrade facilities, introduce new products, or expand operations. Right now, many of those decisions are on hold, and that’s harmful not only in the present but for the future of the Canadian economy,” Payne said.
The Canadian Department of Finance has also highlighted the risks associated with prolonged trade tensions. It noted that Canadian businesses, which rely on cross-border supply chains, face logistical and financial challenges that could reduce U.S. demand and further delay investments. The Bank of Canada’s January monetary policy report echoed these concerns, warning that weaker export activity and increased costs of imported goods from the U.S. would significantly impact business investment.
Auto Industry and Retaliatory Measures
Trump’s tariff threats have also directly targeted Canada’s automotive sector, which has been a cornerstone of the economy for over a century. On Monday, Ontario Premier Doug Ford imposed a 25% surcharge on electricity exports to the U.S., prompting Trump to threaten retaliatory measures, including shutting down Canadian automobile manufacturing.
Although Ford later suspended the surcharge and arranged a meeting with U.S. Commerce Secretary Howard Lutnick, Trump’s initial response included threats to escalate tariffs on steel and aluminum to 50%, before ultimately deciding to keep them at 25%.
Payne dismissed Trump’s claim that he could shut down Canada’s auto industry, pointing out that the sector has deep roots in the country. “These are not Trump’s jobs to steal,” she asserted. The Canadian Vehicle Manufacturers’ Association has traced the origins of North America’s auto industry to Canada, with large-scale production beginning in 1904 in Walkerville, now part of Windsor, Ontario.
“We buy cars in Canada, and that means we should also build them here,” Payne said. “These jobs don’t belong to the United States—they belong to Canada.”
Call for Resolution
With tariffs still in place on steel, aluminum, and potentially the automotive sector, Payne urged both governments to engage in meaningful negotiations and drop the ongoing trade threats. She called for a stable and cooperative trade framework that ensures the security of Canadian jobs and industries.
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