Trump ad spat exposes Ontario premier’s anxiety over fragile auto sector

Ontario Premier Doug Ford annoyed President Donald Trump with a 60-second television ad that used the words of the late Republican icon Ronald Reagan to criticize tariffs.

But the Canadian politician made it clear that Trump has gotten under his skin, too, with threats to crush Canada’s auto industry, a crucial part of the economy in his province.

“Our goal is to make sure that we get a fair deal, not a one-sided Donald Trump deal,” Ford told reporters on Monday during a news conference devoted entirely to trade issues and the furor over the ad. “And I’m focused on auto.”

The television spot, he said, was aimed at highlighting concerns about trade barriers to Americans and their elected officials and was a huge success.

Trump didn’t like it. He halted trade talks between the US and Canada on Thursday and later said he would raise the tariff rate on Canadian goods by 10% - pointing to the TV ad, which used excerpts from a Reagan address in 1987 to make the case against tariffs. Trump continued to stew about it on Monday, saying he doesn’t expect to meet with Prime Minister Mark Carney “for a while.”

But from Doug Ford’s point of view, Canada was at risk of stumbling into a bad short-term deal with the US, one that would have focused on lowering steel tariffs while leaving Ontario’s largest export industry - autos and parts - still vulnerable to attack from the White House.

“There’s no mention whatsoever of auto,” the Ontario leader said of the now-paused US-Canada negotiations. “I feel like it’s slipped to the side.”

As he was speaking on Monday, some auto-sector officials were painting a dark picture of what the Canadian industry might look like if the Trump administration continues using tariffs to make it more expensive for foreign manufacturers to sell into the US market.

“There is no industry without US access,” Brian Kingston, chief executive officer of the Canadian Vehicle Manufacturers’ Association, told lawmakers at a House of Commons committee hearing. His group represents General Motors Co., Ford Motor Co. and Chrysler parent Stellantis NV in Canada. “Diversification is not an option as markets in Europe and Asia are better served by assembly plants in those regions.”

The stakes are huge for Canada and, in particular, Ontario, home to assembly plants owned by those three companies as well as Honda Motor Co. and Toyota Motor Corp. The industry supports about 125,000 direct jobs, and about 80% of them are located in that one province, according to the Canadian government.

Motor vehicles and parts were Ontario’s largest export in 2023 at C$73 billion ($52.2 billion). But unlike the Japanese or European automotive industries, Canada’s is almost entirely focused on exporting to and importing from just one market - the US.

Border Trade

After decades of integration, automakers and parts suppliers have structured their businesses to ship products back and forth across the border. General Motors, for example, makes only one consumer model in Canada - the Chevrolet Silverado pickup truck - while importing an array of US-built models for sale at Canadian dealers.

Ford doesn’t currently assemble any vehicles in Canada, relying on the country only for parts, though it has plans to start making trucks at an idled factory in Oakville, Ontario. It will sell about 220,000 US-manufactured cars and trucks in Canada this year, according to Sam Fiorani, vice president at AutoForecast Solutions LLC, a US consulting firm.

Trump’s tariffs on foreign-made vehicles, along with his separate trade deals that lowered tariffs on Japan and other automaking countries, mean “it is more cost-effective to manufacture a vehicle in Japan or Germany and export it to the US as opposed to manufacturing in North America for North America,” Kingston said. “Doesn’t make sense.”

But while all automakers are suffering from added costs because of tariffs, the economic risks are tilted toward Canada. The country has a population a little larger than California’s and lacks leverage in the tug-of-war over assembly-line jobs. In the latest such example, Stellantis, with two carmaking plants in Ontario, announced this month it won’t go ahead with plans to build the Jeep Compass SUV in one of them. The vehicle will instead be made in Illinois.

Uncertain Future

For the 3,000 people who work at the plant near Toronto, the future is uncertain. Stellantis’ decision drew an angry response from Carney’s government, which curbed the company’s ability to import vehicles from the US tariff-free. Stellantis is likely to sell about 80,000 US-made vehicles in Canada this year, according to AutoForecast Solutions.

Doug Ford said he doesn’t believe the Reagan advertisement is what’s driving Trump’s actions in the negotiations with Canada. It’s about creating uncertainty for US trade partners - and with Canada, the president has done that over and over, he said.

Trump threatened to slap 25% taxes on Canadian products shortly after last November’s election, then signed an executive order for broad tariffs on Canada and Mexico on Feb. 1. He held off implementing those until March, then launched a series of sectoral levies that raise the cost of steel, aluminum, cars, trucks and lumber, among other products.

“If it wasn’t the ad, he’d look out the door or the window, President Trump, and say, ‘Oh, the leaves have turned color. Let’s stop,’” Doug Ford said. “It’s not about the ad. It’s about finding every excuse in the world.”