Toronto, Ontario -- General Motors has taken a US$1.1 billion financial hit from new import tariffs, and Canadian small business advocates are sounding the alarm on the ripple effects.
GM confirmed the charge in its Q2 earnings, attributing the cost to new 25 percent tariffs on imported Chinese parts and vehicles. While the automaker has not raised retail prices, the impact is being felt across its wholesale operations—including collision parts.
According to the company, 44 percent of GM's OEM collision parts used in the U.S. are imported. These parts now face higher costs under the new tariffs. GM has stated it will attempt to absorb the added expenses, but acknowledged some of that burden may pass through to shops and distributors.
The news comes as Ontario’s small auto businesses call for increased government support in the face of rising operational costs. A recent survey by the Canadian Federation of Independent Business found that 65 percent of auto businesses in Ontario reported being directly affected by tariffs. On average, they reported a 13 percent drop in revenue.
Nearly half of the 187 businesses surveyed said they had paused or cancelled planned investments as a result of the financial pressure.
The CFIB says provincial support programs—including the Ontario Vehicle Innovation Network, the $40 million CAD auto modernization program, and the $50 million CAD Ontario Made Manufacturing Investment Fund—are failing to reach small firms. The group estimates that only one to two percent of Ontario’s small auto businesses have benefitted from existing aid.
In its July 16 report, the CFIB recommended the Ontario government lower the small business tax rate from 3.2 percent to two percent and expand access to existing support programs. The group is also calling for a reallocation of funds to ensure small and independent operators—not just large manufacturers—receive assistance.
With GM navigating the cost of new tariffs and small Canadian businesses reporting strain, both automakers and repair facilities are warning of further price pressures and reduced investment without swift policy adjustments.
