The president of the Automotive Parts Manufacturers Association says tariffs placed on the North American auto sector will only hurt consumers and autoworkers, and won’t lead to increased investment by the industry in the U.S.
“(U.S. President Donald Trump’s) invoking tariffs on inputs into the U.S. economy because he thinks that what will happen is people will reinvest. Well, in the auto business, these are 10- or 20-year investments,” Flavio Volpe told BNN Bloomberg in a Wednesday interview.
“People don’t reinvest based on the whim of the president of the United States. He’s destabilizing the market in the U.S. People will have lower disposable income, the cost of money’s going to go up. Nobody’s looking to invest.”
Volpe’s comments came hours after Trump announced that there would be a month-long tariff exemption for the “Big Three” automakers – Ford, Stellantis and General Motors – operating within the existing free trade agreement known as CUSMA.
White House Press Secretary Karoline Leavitt said during a briefing Wednesday that the move came after the heads of the automakers asked Trump for help directly.
“Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with (CUSMA), the president is giving them an exemption for one month, so they are not at an economic disadvantage,” said Leavitt, reading a statement by Trump.
She noted that the purpose of the delay is to give the automakers time to “shift production here to the United States of America where they will pay no tariff. That’s the ultimate goal.”
Volpe said that while the 25 per cent tariff pause may provide some reprieve to the auto industry in Canada, a short-term exemption is not what he and other leaders in the sector have been asking for.
“We’ve been saying for the longest time, we don’t want a carveout… what he did on tariffs to his own industry was going to lead to a shutdown within a week. Here we are on the second day, and he’s looking for an offramp,” he said.
“It’s the nonsensical nature in which this administration is handling the American economy.”
Volpe added that the tariff pause also lacks clarity, as the Trump administration has not specified which auto parts are included in the exemption, or whether other automakers outside of the Big Three but still covered by CUSMA can continue to do business tariff-free for now.
“Like everything else with this administration, you’ve got to wait for the paperwork,” he said, “because they make it up on the fly.”
With files from The Canadian Press
