Honda Motor’s senior vice president, Jennifer Thomas, has issued a stark warning that the planned increase of tariffs on Canadian vehicles and auto parts from 25% to 50%, set for January 1, would be devastating for the automotive industry. This potential doubling of tariffs comes amid stalled trade negotiations between the U.S. and Canada. Thomas emphasized that such high tariffs could cripple the industry, highlighting the critical nature of reaching a trade deal soon.

The tariff threat from President Donald Trump has heightened concerns across the auto sector, which depends heavily on integrated North American supply chains. Thomas cautioned that a bilateral trade approach between the U.S. and Canada would be far less effective than preserving the trilateral framework established by the United States-Mexico-Canada Agreement (USMCA). Automakers and industry groups have been advocating for maintaining this three-country trade pact to support competitiveness in the region.

Honda, the second-largest vehicle producer in Canada after Toyota, noted that over 60% of the vehicles it sells in the U.S. are manufactured domestically, underscoring the interconnected nature of North American manufacturing. Thomas conveyed cautious optimism, citing renewed trade discussions and recent easing of tariffs on materials like aluminum as positive steps toward avoiding the drastic tariff hike. She underscored that a strong trilateral agreement is essential to sustain the success of U.S. automakers.

The USMCA, set into motion in 2020 to replace NAFTA, has faced uncertainty after the U.S. moved to subject it to annual review rather than automatic extension. President Trump has criticized the pact, accusing Canada of unfair trade practices, which complicates the trade talks. As negotiations continue, industry leaders like Honda’s Thomas stress the importance of cooler heads prevailing to prevent disruption and preserve the integrated North American automotive market.