Honda Executive Calls Potential US Tariffs on Canadian Imports 'Catastrophic' for Auto Industry

A senior executive at American Honda Motor Co. warned that a potential increase in U.S. tariffs on steel and auto imports from Canada, scheduled for January 1, would be “catastrophic” for the entire industry. The comments highlight the high stakes for automakers as they watch ongoing trade negotiations between the U.S., Mexico, and Canada.

Tariff Hike Looms

Speaking Tuesday at the Reuters Automotive USA conference in Detroit, Jennifer Thomas, senior vice president of corporate affairs for American Honda, expressed deep concern over the looming deadline. The auto industry has been navigating a complex tariff environment since early 2025.

“I am cautiously optimistic that cooler heads will prevail, and we will avoid that January 1 doubling of the tariffs, because that really would be catastrophic just for the entire industry,” Thomas said. The tariffs in question, imposed under Section 232 of U.S. trade law, include a potential duty of up to 50% on Canadian steel and 25% on autos.

North American Supply Chains at Risk

The auto industries of the three North American countries are deeply integrated, relying on a longstanding trade deal to maintain competitive supply chains. Thomas emphasized the importance of this pact, stating, “We need that trilateral agreement to stay in place in order for the US industry to be competitive. It’s integral to our success.”

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Negotiations have been complicated by specific U.S. demands on North American content requirements, known as "rules of origin." According to sources cited by Reuters, the U.S. has pushed for vehicles to contain 50% U.S.-specific content, which would raise the total regional content requirement to 82% to qualify for trade benefits.

Impact on Future Investment

The uncertainty is already affecting long-term business planning. In August, Honda indicated that its decision to build an eighth assembly plant in North America could depend on the extension of the trade deal. Thomas reiterated that the company is currently at capacity and exploring all options for expansion.

“At the end of the day, we’re going to continue to invest in the US,” Thomas stated, but the unresolved trade issues put North America at what she described as an “unfair disadvantage” compared to regions with more stable trade agreements.