Possible softening of April 2 tariffs ‘zero comfort’ for industry leaders

An employee works on the production line at the Martinrea auto parts manufacturing plant, in Woodbridge, Ont., on Monday Feb. 3, 2025. The site supplies auto parts to both Canadian and US auto plants. THE CANADIAN PRESS/Chris Young

Just over a week before new U.S. tariffs are expected to come into force, Canadian business leaders say they’re not optimistic that any meaningful reprieve is in the works.

“Until a tariff comes into effect and it affects the U.S. economy ... I’m not confident that anybody is going to be able to push the White House back from what it’s threatening to do,” said Flavio Volpe, president of the Automotive Parts Manufacturing Association.

April 2 is set to bring sweeping new reciprocal tariffs from the U.S. in addition to the tariffs on some Canadian and Mexican goods that were delayed by a month. U.S. President Donald Trump had also floated the idea of separate, sector-specific tariffs the same day.

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But over the weekend, media reports suggested the reciprocal tariffs could be narrower than initially announced and that the sector-specific tariffs could be off the table for now.

However, Volpe said that with all the layers of tariffs and the stream of new announcements and threats, the reports aren’t cause for optimism.

“The fact is, the president has threatened multiple layers and types of tariffs on Canada and specifically for the auto sector, and the idea that they may be willing to put some off, while still talking about putting a universal tariff on Canadian goods on April 2 is zero comfort,” he said.

Volpe was in Washington, where he was conducting meetings with various departments and congressional representatives -- but getting no clarity.

On Monday, Trump also said he will place a 25 per cent tariff on all imports from countries that buy oil and gas from Venezuela, as well as new tariffs on the country itself. That is also set for April 2.

The details and scope of what’s coming on April 2 might shift, but wide-ranging tariffs are still expected in the coming weeks and months, said Matthew Holmes, executive vice-president and chief of public policy for the Canadian Chamber of Commerce.

“From the very beginning ... there’s been nothing predictable or consistent about any of this, and that’s part of the point,” he said.

“The uncertainty, the constant shifting ground, that is part of the intent behind these. It’s to make it more costly and less attractive to do business outside of the United States.”

For industries that rely on exports to the U.S., tariffs could be a major hit as customers south of the border may choose to buy fewer goods or switch to U.S. alternatives.

Volpe said Trump is putting the auto sector, which is deeply integrated across the U.S. and Canada, at risk.

“He’s putting the future of General Motors and Ford at risk,” said Volpe, whose association represents the companies that supply the automakers.

Earlier in March Trump enacted tariffs on steel and aluminum, prompting a second round of retaliatory tariffs from the Canadian government.

Retaliatory tariffs are also an issue for Canadian businesses and consumers as they raise the prices on goods coming from the U.S.

At this point, it’s hard to put stock in anything the new U.S. administration says, said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.

“It’s very difficult to figure out where things are headed, and it’s unclear whether the administration knows where it wants to go,” said Darby.

“If Mr. Trump’s goal was uncertainty, he’s achieving it.”

If Trump is considering new exemptions, Darby sees that as an admission that the administration knows how difficult tariffs will be for U.S. consumers and businesses.

Even the threat of tariffs is enough to destabilize industries on both sides of the border, said Holmes.

“It’s adding cost to both markets,” he said.

“It’s making our market less efficient, less viable, more expensive, slower, and that really just begins to undermine the North American marketplace.”

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Article by Rosa Saba.

With files from The Associated Press.

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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:

• CTVNews.ca will have in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
• CP24.com will report on any developments out of Queen’s Park and what the tariffs means for the people of the GTHA.
• BNNBloomberg.ca will explain what this means for the business community, investors, and the market.