The tariffs threatened by the Trump Administration would not only be damaging to Canadian industry, they would be short-sighted and counterproductive for North America as a whole. Given the deeply integrated nature of our supply chains, these tariffs would drive up costs for advanced and heavy manufacturing firms, slowing production and stifling innovation in critical materials and technologies. The long-term consequence would be a decline in North American competitiveness, particularly in the electric vehicle (EV) sector, with the result of further entrenching China’s market dominance of these advanced technologies.
We strongly support Canadian federal and provincial initiatives to engage with U.S. lawmakers and inform American voters about the real economic impact of these measures. Additionally, the federal government’s list of potential retaliatory tariffs sends a necessary signal: these policies would not constitute a “win” for America but instead result in job losses, reduced production, and weakened innovation across the continent.
Recommendations:
In recent months, we have engaged with business leaders and key stakeholders to identify actions to strengthen Canada’s EV industry. In the context of a trade war with the United States, we urge policymakers to take these immediate actions:
1) Prioritize Canadian Procurement: Just as Canadians are encouraged to “buy Canadian” at grocery stores and retailers, governments at all levels must do the same. Federal, provincial and municipal procurement policies should favour Canadian-made EVs and components, shifting away from a ‘lowest bidder’ approach to one that fosters domestic innovation, manufacturing and growth.
2) Accelerate Critical Mineral Development: Catalyze critical mineral projects by immediately supporting advanced projects and streamlining permitting processes, while ensuring the inclusion of Indigenous communities to expedite this. To mitigate price volatility and to attract investment, the government should also explore creating strategic reserves of critical minerals and mechanisms that guarantee a floor price for Canadian critical mineral products, such as contracts-for-difference (CfD) or
Crown off-take agreements with domestic suppliers.
3) Strengthen Innovation and Productivity: Drive productivity by investing in domestic research and development and supporting Canadian innovation in battery technology and advanced manufacturing through a clear commercialization and patent strategy.
4) Protect and Preserve Canadian Production Capacity: New U.S. policies actively discouraging EV and battery uptake and manufacturing are clearly misaligned with growing global demand for these technologies. Canada, therefore, has a unique window in which to position our domestic automotive sector for long term leadership. Governments must start by securing the battery and assembly mandates in which they have invested so heavily. This will send a clear signal that Canada intends to lead the evolution of North America’s industry and not cede it to China as the U.S. currently seems content to do.
Canada has the natural and human resources we need to compete with the world. Now is the time to be
bold.