Honda calls a January 1 U.S. tariff hike on Canadian imports “catastrophic.”

Speaking at the Reuters Automotive USA conference in Detroit on October 27, Jennifer Thomas, Senior Vice President of Corporate Affairs at American Honda Motor Co., warned that a pending U.S. tariff increase on Canadian auto and steel imports scheduled for January 1 would be “catastrophic” for the entire automotive industry. The threatened measure would double tariffs on Canadian-assembled vehicles, trucks, and parts from 25% up to 50%, alongside 50% duties on steel. Adding to the tension, U.S. Trade Representative Jamieson Greer has stated that vehicles assembled in Mexico and Canada would likely still face some level of tariffs even if the trilateral trade agreement is extended. BNN Bloomberg / Reuters

The border tax vs. the Ontario showroom: The most important distinction for local shoppers is where this tax is collected. This tariff is charged by U.S. customs on vehicles, components, and raw steel entering the United States. It is not an excise tax or sales surcharge on a Honda bought and driven in Ontario. Honda Canada sets Canadian MSRPs and incentives independently, so this border friction does not automatically raise Canadian sticker prices tomorrow.

Why Honda calls it catastrophic: Modern automotive manufacturing is deeply integrated across borders. Automotive parts frequently cross between Ontario, Michigan, and Ohio up to six or seven times before rolling off an assembly line. Slapping a 50% tariff on Canadian vehicles creates an enormous competitive distortion: recently struck U.S. trade pacts with overseas nations like Japan and South Korea carry auto tariffs of only 15%. A 50% duty on North American-assembled cars would severely penalize regional manufacturing while giving overseas imports a cost advantage.

Alliston capacity and the eighth plant question: Honda of Canada Manufacturing in Alliston, Ontario builds the Civic and CR-V for both Canadian drivers and export south. Honda's North American assembly network is already running at peak capacity. Back in August, Honda warned it may reconsider plans for an eighth North American assembly facility unless a stable trilateral trade framework is maintained. If crossing the border becomes structurally more expensive, Honda will have to balance production allocations between plants in 2027—but because plants are full, sudden shutdowns or dramatic capacity cuts are off the table.

If you're buying right now: Don't let alarming tariff headlines rush your shopping timeline. A U.S. import tariff does not increase the price of a Honda on a Canadian dealer lot. If you want a vehicle assembled locally in Ontario, see which Hondas come out of Alliston, and check this month's Honda deals to see current factory lease rates, APR offers, and model availability.