Canada auto industry sees midterm boost in tariff talks with U.S.

A wave of Democratic victories in U.S. House and Senate races Nov. 3 strengthens Canada’s position in contentious trade talks with the United States, as American voters issued a sharp rebuke of President Donald Trump’s trade policy, according to Canadian auto stakeholders.

“The Trump wipeout has strengthened our hand,” Unifor President Lana Payne wrote on X, formerly Twitter.

“We must continue to push for the best and right trade deal for Canadian workers.”

Unifor represents tens of thousands of staff at Detroit Three plants and a range of auto suppliers in Canada.

The industry has been on the front lines of the U.S.-Canada trade war instigated in April 2025, when Trump imposed 25-per-cent tariffs on vehicles entering the United States, including those from Canada. Ottawa responded with comparable tariffs on U.S.-made vehicles.

Trump has continually widened the trade war with Canada over the past 18 months, enacting tariffs on a wide range of Canadian products and threatening to increase auto tariffs to 50 per cent on Jan. 1.

Auto sector hammered

Tariffs have hammered the auto sector on both sides of the border, crimping production and creating multibillion-dollar tariff bills for automakers.

Despite months of negotiations and unrelenting pressure from industry to shelve the tariffs, Washington and Ottawa have been unable to reach a deal to resume free auto trade.

But the midterm results give automakers “some powerful new allies” in Washington, Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association, said on X.

“This is a major drubbing — a message from the electorate that its patience has run out.”

Following the midterms, the 120th U.S. Congress is scheduled to be sworn in Jan. 3.

Democrats took control of the House and Senate, flipping senate seats in, among others, the key auto or parts producing states of South Carolina, North Carolina and Ohio. They also held onto seats in Michigan, Illinois and Georgia. Ballots were still being counted midday Nov. 4 in Mississippi, home to Nissan and Toyota plants.

Volpe said it was a “good night,” but cautioned progress could be measured, with Trump still wielding executive power in the White House — including over the order that imposed auto tariffs.

“I would caution against saying nothing will change or also saying everything will.”

The last round of high-level trade talks between Canada and the United States broke down in the 11^th hour in August, with auto among the key sticking points.

But Ottawa and Washington signaled in the lead up to the midterms that the two sides had returned to the table and were closing in on a deal.

The resumption of talks is a positive sign, amplified by the message U.S. voters sent Nov. 3, said Lucas Malinowski, CEO of Global Automakers of Canada, which represents overseas brands in Canada.

“The midterm results made clear that affordability is an important issue for voters, and we’ve always said tariffs increase costs for drivers on both sides of the border,” he told Automotive News Canada in an email.

But getting back to tariff-free trade will take time despite the positive momentum, said Brendan Sweeney, CEO of the Pacific Manufacturing Association of Canada, which represents Honda and Toyota.

“We remain optimistic, but realistic. The mid-term results won’t lead to immediate change.”

The organization continues to press for short-term tariff relief and a “pathway” back to free trade over the next couple years, Sweeney said.