Canada Strikes Back at G.M. Amid Trump Tariff Threats, Escalating North American Trade Tensions

By Ana Swanson and Ian Austen The New York Times November 22, 2025

WASHINGTON — In a bold escalation of cross-border economic warfare, Canada’s industry minister, Mélanie Joly, announced Friday that Ottawa would slash import quotas for General Motors vehicles by 24 percent — a move poised to cost the American automaker hundreds of millions in tariff relief — just days after President Trump threatened to hike duties on Canadian goods by an additional 10 percent over a provincial anti-tariff advertisement.

The tit-for-tat actions, unfolding against a backdrop of stalled U.S.-Canada-Mexico Agreement reviews and Mr. Trump’s aggressive tariff regime, have plunged North American manufacturing into fresh uncertainty, with auto executives warning of potential plant closures and job losses on both sides of the border. The dispute, pitting Mr. Trump’s “America First” protectionism against Canada’s resolve to safeguard its $100 billion auto sector, risks unraveling the fragile truce forged in his first term and could add billions to consumer prices for vehicles and parts.

Ms. Joly, speaking at a news conference in Ottawa flanked by union leaders from Unifor — Canada’s largest private-sector labor group — framed the quota cut as a “devastating payback” for G.M.’s decision to shutter production of its BrightDrop electric delivery vans at the CAMI Assembly plant in Ingersoll, Ontario. The facility, retooled in 2022 with $518 million in combined federal and provincial subsidies, was idled in April amid weak demand, leading to the layoff of 1,200 workers — a blow to a town of 14,000 where the plant accounts for 10 percent of jobs. “Canadian workers deserve clarity and action, not uncertainty,” Ms. Joly said, giving G.M. 15 days to outline a recovery plan or face further penalties, including potential lawsuits over breached subsidy agreements.

The retaliation extends to Stellantis, whose import quota will be halved by 50 percent after shifting Jeep Compass production from Brampton, Ontario, to Illinois — a move Ontario Premier Doug Ford decried as “betrayal” and threatened to litigate. Under a tariff remission framework Ottawa enacted in April to counter Mr. Trump’s duties, automakers could import U.S.-built vehicles duty-free if they maintained Canadian manufacturing footprints. Ms. Joly’s order voids that for G.M. and Stellantis, potentially adding $500 million in annual costs, according to industry estimates from DesRosiers Automotive Consultants.

Mr. Trump, who has imposed 35 percent tariffs on most Canadian goods since July — with steel and aluminum at 50 percent — ignited the latest flare-up last weekend by vowing an extra 10 percent levy on all imports north of the border. The trigger: A World Series advertisement by Ontario Premier Doug Ford’s government, which repurposed Ronald Reagan’s 1980s free-trade speech to lambast U.S. barriers. “Their advertisement was a fraud — a hostile act,” Mr. Trump thundered on Truth Social from Air Force One en route to Malaysia, suspending trade talks and demanding the ad’s immediate withdrawal. Mr. Ford complied after the game, but the damage was done: Canada’s economy, already battered by tariffs that shaved 0.8 percent off GDP this year per Bank of Canada estimates, faces further strain.

U.S. Ambassador Pete Hoekstra, a Trump appointee, amplified the rhetoric Wednesday, berating Ontario’s Washington representative at a formal dinner over the ad and dismissing Canadian outrage at Mr. Trump’s repeated quips about annexing the country as the “51st state.” “This isn’t interference; it’s reality,” Mr. Hoekstra said in Banff, Alberta, earlier this fall. Prime Minister Mark Carney, who assumed office in 2024 on a platform of economic resilience, fired back: “Threats won’t build bridges — they’ll burn them. We’re ready to respond proportionally.”

The auto sector, a linchpin of bilateral trade worth $150 billion annually, is ground zero. G.M.’s CAMI shutdown — the latest in a string of cutbacks, including a shift reduction at its Oshawa truck plant — has union leaders warning of a “worker takeover” if equipment is removed. Unifor president Lana Payne blamed Mr. Trump’s policies directly: “This is the casualty of his destabilizing tariffs — not market demand, but manufactured chaos.” G.M. Canada president Kristian Aquilina countered that the pause aligns production with sales — just 274 BrightDrop vans in Q1 — and pledged six months of full pay for affected workers, but critics like Ontario Tech University’s Sheldon Williamson called it a “significant blow to our EV ambitions.”

Ms. Joly’s “response group,” including federal, provincial and union representatives, aims to lure a new model to CAMI — perhaps from Volkswagen or Hyundai, who’ve eyed Ontario amid tariff dodges. Yet the minister’s hammer-drop signals a harder line: “We invested in these companies; they can’t treat Canada like a disposable market.” Prime Minister Carney echoed her Friday, announcing a $1.2 billion “E.V. Resilience Fund” to court foreign investors, potentially sidelining Detroit’s Big Three.

In Detroit, G.M. CEO Mary Barra called the quota slash “regrettable” in a statement, warning it could raise prices for Canadian consumers by 5-7 percent and disrupt North American supply chains. Stellantis echoed the sentiment, with executives hinting at lawsuits over “unfair retaliation.” The United Auto Workers, in solidarity with Unifor, urged Mr. Trump to exempt auto parts from duties, fearing a boomerang on U.S. plants.

Analysts see a high-stakes game of chicken. “Trump’s threats are leverage; Joly’s payback is principle,” said Wendy Dobson, director of the University of Toronto’s Institute for International Economic Policy. “But if tariffs escalate, we’re looking at $2 billion in annual losses per side — betrayal on a billion-dollar scale.” With USMCA reviews due in 2026, the skirmish could foreshadow a full renegotiation — or worse, a trade war that echoes 2018’s steel spat, which cost 75,000 U.S. jobs.

For Ingersoll’s Sarah Petrie, a laid-off assembler now commuting 90 minutes for temp work, the drama is personal. “We built this plant with our sweat and their subsidies,” she said at a rally. “Now it’s betrayal — Trump’s tariffs, G.M.’s exit, Joly’s fight. Who wins when families lose?”

As Mr. Trump prepares for next week’s G20 summit in Brazil — where Mr. Carney will press for exemptions — the border feels less like a line and more like a fault. In a continent intertwined by supply chains and shared prosperity, this war of words risks fracturing more than trade deals: It’s testing the bonds of alliance in an era of power plays and payback.