# Honda Warns U.S. Auto Sector of Risk From Canada Tariff Hike By Riza Dagoc Canonical URL: https://www.tokenpost.com/news/regulation/42256 Published: 2026-10-28T02:16:24.000Z Updated: 2026-10-28T02:16:24.000Z Section: Regulation > Trump has threatened to raise duties on Canadian vehicles and parts to 50% from 25% on Jan. 1 if Washington and Ottawa fail to reach a deal by year-end. American Honda Motor Co. executive Jennifer Thomas, the company’s senior vice president of corporate affairs, warned Tuesday that a threatened U.S. tariff increase on Canadian vehicles and parts could put North American auto production under strain as components cross borders during assembly. President Donald Trump has threatened to raise the duties from 25% to 50% on Jan. 1, 2027, if the U.S. and Canada do not reach a trade deal by year-end. Thomas called the increase “catastrophic for the entire industry.” Thomas urged the U.S., Canada and Mexico to maintain a regional trade arrangement modeled on the United States-Mexico-Canada Agreement (USMCA). The pact replaced the North American Free Trade Agreement and took effect in 2020. Auto trade groups, including one representing Honda, have pressed for a three-country framework instead of separate bilateral deals. The USMCA is moving into annual reviews rather than an automatic 16-year extension, U.S. Trade Representative Jamieson Greer announced. Thomas said she was cautiously optimistic and welcomed signs of renewed U.S.-Canada trade talks, including steps to ease duties on critical materials such as aluminum. Honda is Canada’s second-largest vehicle producer, behind Toyota Motor. The company says U.S. plants make more than 60% of the vehicles it sells in the United States. Thomas said trade terms with some overseas vehicle-producing countries are more favorable; U.S. trade agreements with Japan and South Korea set vehicle tariffs at 15%. Canada has also announced a [$6.2 billion package for steel, autos and critical minerals]() as U.S. tariffs weigh on those industries. Trump’s threatened tariff increase is tied to whether Washington and Ottawa reach a deal by the end of 2026. ## Links in this article - [$6.2 billion package for steel, autos and critical minerals](https://www.tokenpost.com/news/business/38216)