DETROIT — The automotive industry faces a "catastrophic" scenario if the U.S. and Canada cannot reach a new trade deal by the end of this year, an executive with Honda Motor warned Tuesday.
President Donald Trump has threatened to double tariffs on Canadian vehicles and parts from 25% to 50% on Jan. 1 if the two countries don't reach a deal.
"That really would be catastrophic for the entire industry," Jennifer Thomas, senior vice president of corporate affairs at American Honda Motor Co., said during a Reuters automotive conference in Detroit.
Thomas said, ideally, the countries would also include Mexico in the arrangement and reach a trilateral deal, like the United States-Mexico-Canada Agreement, or USMCA. Trade associations representing Honda, as well as every major player in the U.S. automotive industry, have been advocating for that more comprehensive accord and against bilateral arrangements between two countries.
Her comments come months after U.S. Trade Representative Jamieson Greer announced that the U.S. would not automatically extend USMCA, moving the trade pact into an annual review process instead of a 16-year trilateral extension.