APMA's Volpe on Trump tariffs: 'There is no border in automotive'

In a recent CBC News interview, Flavio Volpe, president of the Automotive Parts Manufacturers' Association in Canada, addressed the looming tariffs aimed at Canada and Mexico from President-elect Donald Trump and the impact such legislation would have on all three North American nations.

Volpe said that the whole industry works on single-digit profit margins citing that a 10% profit margin is unthinkable and a a 25% tariff applied to Canada and Mexico would be catastrophic to all three nations.

He said the auto part supply chain is very integrated across the three North American countries, saying President-elect Donald Trump is trying to “disrupt the conversation early.” 

Volpe added that the U.S. and Canada are so integrated in auto manufacturing that when a vehicle ends up in a customer’s hand, parts have crossed the borders seven or eight times.

“There is no border in automotive,” he said. “Half of the cars we make in Canada are American brands; half of the components that go into all of the cars are that made in come from the U.S. and all of the raw materials,” he said.

He stated that the countries are "perfectly aligned" in their objectives, and if the context from Trump is to compete with China, the U.S needs Canada and Mexico need to be part of the equation. 

“It’s not us saying we have leverage. This is us saying we can’t do it without you either. We have the critical materials. We’ve got the aluminum in Quebec, but they don’t have the aluminum capacity in the U.S. We make tools and we make parts together. We make cars together … I think (the Trump Administration) knows they can’t do it without us, and I think we need to be humble, but we can be persuasive because we have cards they don't have, and they have markets we don’t have, and this has worked for the last 150 years. We need to be patient,” Volpe said. “No one is more commercially aligned than the U.S. and Canada.”