The threat of 25 per cent tariffs on all imports from Canada and Mexico into the U.S. ahead of the United States-Mexico-Canada Agreement (USMCA) renegotiation dominated conversations

What a difference a year makes.

In 2024, an optimistic mood marked the EV Innovation & Technology Conference in the wake of BloombergNEF’s announcement that Canada took first place in its lithium-ion battery supply chain ranking, surpassing China, the reigning powerhouse.

A decidedly different tone was struck at the well-attended 2025 conference held in Toronto for the third straight year. The event happened mere days after the U.S. and Canada narrowly averted a trade war. President Donald Trump’s threat to impose 25 per cent tariffs on all Canadian and Mexican imports had rattled the market, with the automotive sector being especially vulnerable should tariffs be implemented.  According industry representatives a tariff this high would halt auto manufacturing in both countries within a week.

With the auto industry still contending with a heightened level of economic uncertainty, the opening panel was aptly titled, “U.S., Mexico and Canada: EV Manufacturing in the time of Trump.” Panelists included the respective head of each auto association in the three countries who have been in constant contact with each other since the trade dispute with the U.S. began in the lead up to re-negotiating the USMCA.

But as Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA), said, “There’s no negotiating table right now in the USMCA discussions. There is only chaos.”

Navigating the storm

Joining Volpe and moderator, Emma Jarratt, executive editor at Electric Autonomy, were Collin Shaw, president of MEMA, The Vehicle Suppliers Association, and Francisco N. González Díaz, executive president, Industria Nacional de Autopartes, A.C.

Each offered their particular approach to steering their members through the chaos.

In the U.S., prior to President Trump pausing the tariff threat Shaw said the priority was keeping his 500 members informed.

“How do we make sure that people understand how important this relationship with Canada and Mexico is,” says Shaw. “In North America we can’t have an automotive industry without a healthy USMCA.”

Noting that Canada simply does not have the economic clout of the U.S., Volpe agreed with Hasenfratz that the auto industry would shut down within a week should the Trump administration follow through on a 25 per cent tariff.

As head of the APMA, Volpe has been on a media blitz and government relations push, impressing upon all stakeholders the importance of protecting Canada’s sizable investments in supply-side producers.

To our neighbours to the south, Volpe says: “Don’t screw up a good thing.”

However, everyone handles pain differently. In Mexico, the tariff threat is understood as leverage to reduce the flow of migrants and fentanyl into the U.S., said Díaz, adding that Mexico “doesn’t want to escalate the situation. We’re not thinking about retaliation. The decision of the government is to negotiate around the tariffs to eliminate this threat.”

Díaz also noted that uncertainty is status quo in Mexico. Industry routinely incorporates uncertainty into the planning process.

“In Mexico,” reported Díaz, “you build many scenarios. We are accustomed to working with unpredictability.”

Where do we go from here?

There was easy agreement among the panelists that each region brings their own source of strength to the table and that, together, the U.S., Mexico and Canada make a powerful supply source and consumer market.

“We have to have a region that is built on principles of competition and free trade,” says Shaw. “The threat that we face is very real, and it’s important that we wake up to that and start fighting and moving to create policies that promote competitiveness and limit the infighting. That’s why USMC is so vital to the success of this region.”

For Shaw, the goal is ensuring that the auto sector has adequate representation at the negotiating table. To that end, he emphasized the importance of disseminating accurate data and information and the need for clarity concerning the automotive industry’s social and economic significance in each country.

Díaz adds that teamwork is critical to a successful trade negotiation. He also says the most important asset in the auto industry is the talent pool, but right now it’s too shallow and requires support dedicated to educating and upskilling the workforce.

Building on that, Volpe stressed the need to streamline the permitting system and regulatory regime in Canada to fast track critical mining operations, distribution channels and the movement of people to fill jobs in different areas of the country than they were certified in.

In short the group says in order to manage the uncertainty and emerge on the other side there is a need for: more cohesion, better communication and a united front.

“We all need to be saying the same thing,” says Shaw.

“All of us are saying that the USMCA is vital. It may be vital for different reasons for each country, but we’re all delivering the same message.”