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Senators Trying to Remove Canada From Trump CrosshairsSenators Trying to Remove Canada From Trump Crosshairs
U.S. Senators from four states may force the Trump Admin. to back away from imposing tariffs on Canada or risk losing his ability to impose tariffs and take other actions under the premise of protecting the U.S. in a “national emergency.”
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GMC Sierra among products GM builds in Canada.
Lobbying to spare Canada from President Trump’s tariff scheme is picking up steam in Washington.
Republican Senators from Maine, Kentucky, Iowa and Alaska have indicated they will join Democrats in a bill sponsored by Sen. Tim Caine (D-Va.) to end the “emergency” Trump declared enabling him to suspend the USMCA trade agreement he approved in his first term, allowing him to impose high tariffs on trade with Canada and Mexico.
“A lot of talks are happening to spare Canada from tariffs,” one member of the Congressional auto caucus tells WardsAuto. “It looks like there could be a carve-out for Canada, with tariffs still being applied to Mexico, for now, but we are working on getting relief on Mexico too.”
A lot of Trump’s agenda to limit immigration as well as other things he is trying to do without Congress hinge on his declaration of an emergency on U.S. borders, which he has defended because of illegal border crossings and fentanyl smuggling. However, neither issue can be defended at the border with Canada.
Trump has invoked emergency powers, such as the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA), which gives him broader powers than those spelled out in the U.S. Constitution.
Canada doesn’t seem to pose any threat to U.S. national security and has been an important ally and trading partner to the U.S. In fiscal year 2024 (Oct. 1, 2023, to Sept. 30, 2024), U.S. Customs and Border Protection (CBP) reported 23,721 apprehensions of individuals illegally crossing the U.S.-Canada border, while CPB reported some 2.1 million migrant encounters along the U.S.-Mexico border during the same period.
Senators from the four states representing the opposition to Canadian tariffs do considerable business with Canada, and companies harmed by Trump’s tariff strategy operating in those states have been loudly complaining to their Republican colleagues and the White House
The Breakdown On Sparing Canada
A 25% tariff on Canadian imports would raise the cost of parts and vehicles. The Center for Automotive Research (CAR) has estimated that a 25% tariff could raise the price of a typical car $2,000–$5,000. If the tariffs aren’t implemented, automakers would avoid as much as $6 billion per year in higher costs onup to $25 billion in Canadian auto and parts imports.
Automakers rely on “just-in-time” deliveries. Tariffs would force costly rerouting or stockpiling. Letting Canada off the hook would save automakers serious money in this cost bucket.
General Motors has the highest exposure to tariffs on Canada. The automaker operates a major plant in Ontario, assembling Chevrolet Silverado and GMC Sierra fullsize pickups. It also relies on Canadian parts suppliers, including Magna and Linamar. Stellantis also has risk north of the border, with two plants in Ontario, as well as from parts supplied by Canadian plants. Honda operates a major plant in Ontario producing the CR-V and Civic.
If Canada tariffs are avoided, U.S. consumers would avoid price hikes in building materials and shortages that would create higher prices in the new housing market and home renovation. They would also avoid higher prices that would come from retaliatory tariffs from Canada on energy.
By creating a carve-out for Canada, Trump would still be able to enact tariffs on goods imported from Mexico, a far more politically digestible move than punishing Canada because of the actual problems with illegal border crossings and fentanyl smuggling at the southern border.
The President’s agenda would be severely compromised if his enactment of the Emergency Powers Act was reversed by Congress. Operating under the measure allows Trump to unilaterally redirect military funding, suspend asylum claims, increase weapons exports and deploy military personnel domestically.
Congress, even Republicans, are getting frustrated with the White House steamrolling the legislative body. The Republican revolt also comes a day after the party lost a key election for a Wisconsin Supreme Court seat where Trump advisor Elon Musk got personally involved promoting a conservative judge with money, time and social-media support. His candidate lost by 10 points.
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