In Canada’s automaking heartland, the news came like a hammer blow: General Motors is cutting production because of U.S. President Donald Trump’s trade war.
GM announced Friday morning that it will reduce production at its Oshawa assembly plant this fall, citing tariffs imposed by Trump聽and falling demand.
鈥淕M鈥檚 Oshawa Assembly will return to a two-shift operation in light of forecasted demand and the evolving trade environment,鈥 the company said in a statement Friday morning. 鈥淭hese changes will help support a sustainable manufacturing footprint as GM reorients the Oshawa plant to build more trucks in Canada for Canadian customers.鈥
The Oshawa assembly plant produces light and heavy versions of the Silverado pickup truck, which is also made in Mexico and the U.S.
In a city where GM has been producing cars for more than 100 years, the news hit hard. Mayor Dan Carter had a simple message for Trump: Stop treating Canada like the enemy.
“We are not your enemy. We are your friends, we are your neighbours. We have always been there for Americans, and we will always be there for the Americans,” said Carter.
Tariffs will hurt workers and companies all across North America’s tightly integrated automotive sector, Carter added.
“This isn’t just going to hurt Canadians. This is going to have a devastating effect on American companies and workers too,” Carter said.
The news from GM is no surprise, said Flavio Volpe, CEO of Canada’s Automotive Parts Manufacturers’ Association.
“It’s a completely predictable consequence of the tariffs, but it doesn’t make the news any less difficult to hear,” said Volpe, who said he’s still hopeful that Trump’s administration will allow cars produced in Canada into the U.S. as long as they comply with the Canada-U.S.-Mexico trade agreement. Tariffs in such a highly integrated industry make no sense, Volpe said.
“It’s completely nonsensical. We talk about it as Oshawa. But the reality is that it’s General Motors, a company headquartered in Detroit, that’s being hurt by Washington. It doesn’t make sense for anybody,” Volpe said.
Canada’s automotive sector faces a roughly聽$10-billion hit for each quarter the tariffs are in place, estimated Pedro Antunes, chief economist at the Conference Board of Canada. And GM’s move is a clear example of why, said Antunes.
“It just becomes untenable for the industry to ship product with that kind of tariff. There’s nobody who’s going to buy cars with that kind of price increase,” Antunes said.聽
Unifor officials slammed the move, which they estimate will cost 700 union workers their jobs at the assembly plant and another 1,500 elsewhere, including at parts manufacturers.
鈥淲e will not allow GM to barter Canadian jobs to gain Donald Trump鈥檚 favour. Cutting the third shift at Oshawa Assembly is a reckless decision that deals a direct blow to our members and threatens to ripple through the entire auto parts supplier network,鈥 said Unifor national president Lana Payne. 鈥淕M needs to reverse this short-sighted move before more damage is done.鈥澛
Payne also said the move shows disrespect for Prime Minister Mark Carney鈥檚 upcoming discussions on trade with the U.S.
鈥淕M鈥檚 move is premature and disrespectful 鈥 jumping the gun before Prime Minister Carney and President Trump even begin their talks on a new economic deal,鈥 Payne said.
In his first news conference since Monday’s election, Prime Minister Mark Carney expressed his “deepest sympathy” with the affected workers and their families, and said GM’s decision was a “terrible manifestation” of the effects of Trump’s tariffs on Canada.
“I will remind (you) that it’s not just words,” Carney told reporters in Ottawa. “We are in a crisis.”聽
He reiterated his commitment to making sure that all revenue from counter-tariffs goes to supporting workers, and said he will make sure companies maintain employment and investments in Canada.
“And if not, there will be consequences for those companies,” Carney said.
Trump slapped a 25 per cent tariff on all cars and light trucks not made in the U.S., while also hitting automakers with聽25 per cent duties on aluminum and steel. Starting Saturday, auto parts are also set to be levied a 25 per cent tariff, but with an exemption for parts that comply with the Canada-U.S.-Mexico trade agreement.
Canada has聽retaliated聽with a 25 per cent tariff on American-made cars imported to Canada, along with some carveouts for CUSMA-compliant vehicles.
The five companies that assemble cars in Canada聽will also be allowed to import a certain number of U.S.-assembled vehicles free of the counter-tariffs.
Ontario Premier Doug Ford called the announcement 鈥渆xtremely tough鈥 news for autoworkers in Oshawa.
鈥淭hese are hardworking people who have helped build Ontario鈥檚 auto industry,鈥 Ford said in a post on X, noting GM has reaffirmed its commitment to the Oshawa plant.
Ford said the province would continue working to support a strong future for the facility.
鈥淚n the face of economic uncertainty caused by the chaos of President Trump鈥檚 tariffs and tariff threats, we will continue to fight every single day to attract new investment, secure good-paying jobs and support workers and their families.鈥
Ontario NDP Leader Marit Stiles also slammed the GM announcement as an attack on Canadian workers.
鈥淥ntario鈥檚 autoworkers built General Motors and our province invested heavily in Stellantis. We cannot just 鈥榳ait and see鈥 while these companies take a page out of Trump鈥檚 playbook and throw the future of thousands of workers and their families into chaos,” Stiles said in a written statement. “Workers are counting on us to fight like hell for every auto job.鈥
In April, Canada’s manufacturing sector suffered its worst month since the height of the global COVID-19 pandemic, according to an index that measures production and new orders.
The GM news comes after two moves by the U.S. this week aimed at helping American automakers deal with the impact of tariffs. Thursday, a border agency said Canadian-made auto parts that comply with the Canada-U.S.-Mexico trade agreement won’t be hit with a 25 per cent tariff.
Tuesday, Trump signed an executive order clarifying that auto tariffs and a 25 per cent tariff on parts won鈥檛 be 鈥渟tacked鈥 on top of already-existing import levies, such as those on steel and aluminum. It also said automakers would be able to apply for a rebate of tariffs paid on some imported automotive parts.
But in the order, and an accompanying proclamation, Trump made it clear he鈥檚 still aiming to bring as much automotive production to the U.S. as he can.
鈥淚t is necessary and appropriate to modify the system of monetary fees and related measures 鈥 to more effectively eliminate the threat imports of automobiles and certain automobile parts pose on the national security of the United States,鈥 Trump said in his proclamation.
With files from Mark Ramzy, Kristin Rushowy and The Canadian Press
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