Trump's threatened tariffs on Canadian exports puts Honda in crosshairs
Posted November 28, 2024
American President-elect Donald Trump signaled his intentions to impose a 25 per cent tariff on all goods exported into the United States from Canada on his first day in office (Jan. 20, 2025) marking a direct hit on Honda of Canada Manufacturing's (HCM) operations in Alliston, if carried out, as the automaker is underway on its $15 billion full-on expansion into the electric vehicle market.
Approximately 80 per cent of HCM's product line - Civic Sedan and CR-V Hybrid - is exported to the United States, and would be subject to the tariff adding to the vehicles' purchase price for Americans. Those added costs put exporters at competitive disadvantages which could have dire consequences for HCM in Alliston if they were permanent.
John Bordignon, Brand Communications, Honda Canada, told Free Press Online, they would not speculate about what impact the new U.S. Administration would have on their operations.
"What I can tell you is that we remain committed to our current Canadian manufacturing and our plans for electrification production in Canada," said Bordignon in an email. "Our Canadian EV value chain investment plans are for the long term and already include flexibilities to allow us to adapt present and future operations where necessary and reflect any changes in market conditions."
Honda announced its electrification plans last April, and will include a new EV assembly located on HCM's current property, split into two units - one on the south side of the current entrance, and one on the north side, with an overhead connection. At build-out it will have capacity to build 1,000 vehicles a day. (240,000 a year) and produce its EVs, hybrids, and internal combustion engines on the same line. The best case scenario is a 2028 start-up. It's anticipated the battery plant will be located off-site but on nearby property on Industrial Parkway. Its capacity will be 36 gigawatts. Planned startup is 2029. HCM anticipates adding approximately 1,000 new direct jobs to its current roster of about 4,200 associates. Federal and provincial government financing incentives are part of the package.
"We have confidence in our governments’ efforts to remediate the matter," said Bordignon, "and we will be here to support our partners."
