Honda executives warned Tuesday that a proposed rise to 50% tariffs on Canadian-made cars and parts would devastate the North American auto sector.
“That really would be catastrophic for the entire industry,” Jennifer Thomas, senior vice president of corporate affairs at American Honda Motor Co., told reporters at a Detroit automotive conference.
Thomas said the ideal outcome would extend the existing USMCA to include Mexico, creating a three-nation pact similar to the current agreement. Trade groups representing all major U.S. automakers have pushed for a deal that covers all three countries rather than a two-country arrangement, as they believe this would be more beneficial for the industry.
U.S. Trade Representative Jamieson Greer recently announced that the USMCA will not receive an automatic extension, moving the pact into an annual review instead of a 16-year continuation.
President Trump originally negotiated the USMCA to replace NAFTA, but he later accused Canada of taking advantage of the United States for years.
Thomas described herself as “cautiously optimistic” that cooler heads will prevent the tariff hike. She noted reports of renewed talks and a modest reduction in duties on aluminum, a material critical to vehicle assembly.
While Honda operates large facilities in Canada, more than 60% of the cars it sells in the United States are built at domestic assembly sites.
Thomas added that she never thought the North American region would be put at a disadvantage like this, pointing out that some overseas markets enjoy lower tariff rates.
The Trump administration has negotiated trade deals with other countries such as Japan and South Korea, which are major exporters of vehicles to the U.S.