Will auto tariffs stay a permanent obstacle for a Canada‑U.S. trade deal?

Canadian and American officials say cars were a main problem in the failed talks.

U.S. President Donald Trump's trade representative recently spoke about Canada's car industry. He said the industry’s North American link could stay a big problem if talks restart. The comment shows the issue is still important.

Trump and U.S. Commerce Secretary Howard Lutnick have said the U.S. wants Canadian car jobs to move to the United States.

In a Canadian interview with CBC News, U.S. Trade Representative Jamieson Greer was asked about the future of the U.S.–Canada car sector.

"We have a big gap in our manufacturing jobs here, and cars are a big part of that," Greer told CBC News chief political reporter Rosemary Barton on Wednesday.

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"It isn’t a secret – we think that globalisation with our neighbours, who we trade a lot with, has hurt places like Michigan, Ohio, Pennsylvania and Wisconsin," he said.

When asked if the Trump team wants to end car making in Canada, Greer said the goal is to "re‑industrialise" in general.

"I understand why Canadians want as many concessions as possible from the U.S.," he said. "But we focus on what’s good for America and will accommodate Canada as far as we can."

Mark Wiseman, Canada’s ambassador to the U.S., told Reuters that Canada cannot accept a deal that does not protect its car industry.

"We need those capabilities in Canada. We need those jobs in Canada. They are a huge part of our industry in Ontario and Quebec," he said.

"From Canada’s view, keeping a strong car assembly and parts sector at home is essential," he added.

Greer led the U.S. side of the talks that fell apart last week. Both sides said U.S. tariffs on finished cars and Canadian auto parts were still open issues.

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Canadian negotiators wanted the 25% tariffs cut, but say the U.S. suddenly tried to keep heavy‑ and medium‑size trucks out of the relief. The Americans, including Greer, say the truck exclusion was not a last‑minute ask.

Heavy and medium trucks include some Ford F‑Series pickups and GM Silverado models built in Ontario, employing about 20,000 workers.

Greer said medium‑ and heavy‑duty truck duties are "separate" from the lower auto tariffs the Trump team offered.

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Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, said Greer’s recent remarks should not be surprising.

"The president has said it, the commerce secretary has said it … they want cars made in the U.S., not in Canada, so you don’t have to tell me that again," Volpe told CBC News.

Since the start of his second term, Trump has said "we don’t need Canada to make our cars." He repeated the claim in the Oval Office after signing an order to rename Lake Ontario to Lake America.

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"We want to make cars here. Canada can make its own cars if it wants, and can keep making cars for Canada. But we don’t want them to make cars for the United States," he said.

Last fall, Lutnick told a Toronto audience he wanted tariffs to pull car assembly out of Canada. Sources said Lutnick was unhappy with the deal, especially the auto‑tariff part, just before talks collapsed.

Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, said he is "encouraged" by Greer’s re‑industrialisation goal. He added that rebuilding the U.S. auto industry will inevitably involve Canada.

"It’s not surprising we will hear more heated talk after the negotiations broke down," Kingston told CBC News.

"Greer did not say Canada can’t have a car industry. In fact, Canada should do everything to protect and strengthen its industrial base. We will do that by strengthening our tightly‑integrated auto sectors together," he said.

Trump threatened to double tariffs on Canadian‑made cars and non‑CUSMA auto parts in the new year after talks fell apart last week.

Kingston said continued retaliation will endanger the whole North American auto industry.

"If we cannot lower tariff rates, the whole North American industry becomes less competitive and loses its ability to compete with makers elsewhere," he said.

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Despite the breakdown, Kingston believes a deal is still possible.

"Cool heads will win. We need to stop the retaliation cycle and start talking again," he said.

Volpe hopes the Trump team sees that separating the Canadian and U.S. auto sectors makes no sense.

"Countries don’t make cars. Industries in those countries make cars," he said.

"When an ambassador says Canada is the cause of U.S. auto decline, it’s like blaming your right foot for pain in your left foot."

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Volpe says he is glad Greer gave a Canadian interview, seeing it as a sign that the trade issue is moving forward in the Trump administration.

He said no matter where talks go, Canada will have to accept any deal it signs.

"If we sign a deal that includes the auto sector, we own that. It isn’t the Trump administration’s fault if they want something from us. If we give it to them, the responsibility is ours," he said.

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