For Canadians trying to follow the twists and turns of our trade relationship with the United States, the past several days have been a lot to absorb.
For months, Canada negotiated with the United States against the backdrop of tariffs already disrupting industries on both sides of the border. Those negotiations were difficult, but progress was being made, including toward reducing U.S. tariffs on Canadian-built vehicles.
Then things changed. At the eleventh hour, the United States altered important elements of the proposed agreement, including how Canadian automotive content would be treated and which Canadian-built vehicles would receive tariff relief.
Canada faced a choice: accept an agreement our government determined was no longer in our economic interest or walk away.
Canada walked away.
That was the right decision.
No Canadian government should accept a bad agreement simply so it can say it has a deal. Canada negotiated in good faith. When the terms changed in ways that threatened Canadian workers, investment and production, our government had an obligation to defend the national interest.
The United States subsequently escalated the dispute, imposing 50 per cent tariffs on billions of dollars of additional Canadian exports. Existing U.S. automotive tariffs remain, along with the threat of even higher tariffs on Canadian vehicles and parts.
Canada has responded with countermeasures of its own. That is where we find ourselves today.
Canada should always be prepared to talk. But we should negotiate from a position of strength and never accept an agreement that sacrifices our long-term economic interests.
The North American automotive industry is extraordinarily integrated. Parts and components can cross the border several times before a finished vehicle reaches a dealership. Tariffs on steel, aluminum, parts and finished vehicles layer costs upon costs.
Eventually, somebody pays. For BC’s new car dealers, this is very real. Dealers employ thousands of British Columbians in communities throughout our province. They support local organizations, invest in skilled trades and contribute significantly to BC’s economy. They also work every day with consumers already confronting serious affordability pressures.
Canada should therefore use this moment not only to defend our economy, but to strengthen it.
We need to diversify our trading relationships, eliminate unnecessary interprovincial trade barriers and make Canada more competitive for investment. In the automotive sector, we should also explore opportunities to give Canadians greater access to vehicles from trusted international markets that meet appropriate safety and environmental standards.
And we should remember that Canada has leverage. We are not simply a supplier to the United States. We are an enormously important customer. Canadians purchase American-built vehicles and billions of dollars of other U.S. goods every year.
For generations, our two countries prospered because we built things together and traded with one another.
The United States has chosen to challenge that relationship. Canada must respond accordingly.
We didn’t start this trade war, and we should never be afraid to defend ourselves. But our objective should be bigger than simply getting through it. It should be ensuring Canada emerges stronger, more competitive and more resilient than before.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].
