While reports of the Keystone XL pipeline and renewed talks of a bilateral security and trade pact dominated headlines during last week’s White House visit, there are also clear signs emerging that Canada’s provinces may be pitted against each other as they vie for the industries that prop up their regional economies.
With Prime Minister Mark Carney by his side, President Donald Trump held court and took questions from the media in Washington. He was quick to call out Canada’s automotive sector, stating that “It’s a tough situation because we want to make our cars here. At the same time, we want Canada to do well making cars. So we’re working on formulas, and I think we’ll get there.”
The “formula” he referenced could actually spell serious trouble for Ontario manufacturing. Just a day after Trump spoke, media reports indicate that the U.S. Commerce Secretary Howard Lutnick purportedly stated that the U.S. no longer wants vehicles assembled in Canada, although it would continue to import auto parts.
Industry seems to be taking these cues seriously, with Stellantis announcing plans this week to relocate production of its Jeep Compass line from Ontario to the U.S. While the Carney government has joined Premier Doug Ford and local mayors in decrying the move, the existential threat that has been bearing down on the sector since Trump was inaugurated is now becoming a reality.
While bilateral negotiations continue to take place between Canada and the U.S., the federal government is also simultaneously negotiating with China to have tariffs on Canadian canola and pork lifted. In exchange, China wants tariffs removed on Chinese-made EVs.
If those tariffs are removed in the coming months, the double whammy of a market flooded with cheap imports, combined with ongoing CUSMA renegotiations, will fundamentally undermine the Canadian automotive sector’s ability to compete and to sustain manufacturing jobs in Ontario. While subsidies and temporary support have been deployed at both the provincial and federal levels to offset similar challenges in the past, they are unlikely to serve as an effective stopgap this time around.
Ford, for his part, is fighting for airtime just like everyone else. His multi-million-dollar ad campaign running south of the border has kept Ontario in the conversation. But Prairie premiers are making their voices heard too, as they press for resolutions on behalf of the industries central to their regions in the face of economic devastation.
For those who believe Trump poses the greatest threat to Canadian industry, think again. He may have lit the match, but countries like China are fanning the flames–seizing on the current trade dynamics to their advantage. As for Canadians who have spent the last ten months embracing the “elbows up” mantra, the effort may yet prove to have been in vain.
Josie Sabatino is a Senior Consultant at Summa Strategies, focused on providing strategic insight and helping clients meet their objectives in an ever changing and complex political and regulatory environment. Prior to joining Summa, Josie spent nearly a decade in political communications and most recently served as the Director of Communications to the Hon. Erin O’Toole, former Leader of the Official Opposition.
