Tariff Threat Looms Large Over Toyota and Honda's Canadian Operations

Tariffs proposed by U.S. President Donald Trump on Canadian car imports could end up costing Japanese automakers Toyota and Honda billions of dollars.

The tariffs, which would raise the tax to 50% from 25%, target a significant portion of Canada's auto industry, with over three-quarters of its production coming from Toyota and Honda.

Analysts say that if the tariffs take effect on January 1 as planned, the two companies could be forced to shut down some of their Canadian assembly lines. This would have a major impact on the Canadian economy, which supports around 427,000 jobs through its auto industry.

The proposed tariffs come at a bad time for Toyota and Honda, who are already struggling with competition from low-cost Chinese electric vehicles in markets such as Southeast Asia, Europe, and Latin America. The U.S. remains their biggest market, where they sell significant numbers of Canadian-built cars, including the RAV4 and CR-V.