Thousands of temporary layoffs at automakers and parts suppliers in Canada are “just the start of it,” warned the country’s largest private-sector union, as the imposition of U.S. tariffs enters its second week.
“The industry will not be able to live under these kinds of tariffs. The longer this goes on, the bigger the fallout we’re going to see,” Unifor President Lana Payne said in a Tuesday interview. “My concern is that we see temporary layoffs turn into much longer layoffs.”
About 6,000 Unifor members were given short-term layoff notices in the aftermath of Trump’s April 2 announcement, which placed new tariffs on most countries. The majority of the notices came from a Stellantis NV plant in Windsor, Ont., which makes Chrysler and Dodge vehicles, as part of a two-week shutdown while the company assesses the impact of tariffs.
More auto sector businesses have since culled their workforce, including a manufacturer of recreational vehicles that laid off 79 workers last week.
Canada responded to U.S. President Donald Trump’s tariffs on Wednesday, launching 25 per cent counter-tariffs on imported U.S. vehicles. The duty applies to U.S.-made cars that don’t comply with the United States-Mexico-Canada Agreement, known as USMCA, as well as the non-Canadian and non-Mexican content of autos that do comply with the deal.
Prime Minister Mark Carney’s government said it’s developing a “remission framework” that may offer relief to automakers from counter-tariffs if they maintain production and investment in Canada.
Many parts suppliers are already on shaky financial ground, operating on tight margins and having been saddled with debt to invest in electric-vehicle production that fell short of expectations. Some parts makers have pushed automakers to help them absorb the cost of tariffs.
“We’ve already heard early signals from auto companies to their employees that, depending on how long this lasts, we could be facing broader layoffs across the parts sector,” Payne said.
“Not all these suppliers are in the same economic boat; some are more fragile than others. But there are so many parts of this sector where, if the supplier has to pay even a portion of these tariffs, it won’t be able to operate.”
Jacob Lorinc, Bloomberg News
©2025 Bloomberg L.P.
