The commercial tension between the United States and Canada could lead to the end of the North American Free Trade Agreement (NAFTA) and have a negative impact on the American automotive industry. Honda is the second-largest vehicle production in Canada, but many automotive authorities have expressed concerns regarding the lack of treatment of North America and the uncertainty of double tariffs due to the quantity of parts that often cross borders during the production of vehicles. The information on double tariffs taxes was relevant since President Trump threatened to double the double tariffs on Canadian vehicles starting January 1st if no agreement is reached between the two countries.

According to Jennifer Thomas, vice president of administration general of American Honda Motor Co., ideally both parties should include Canada in their negotiations and reach a trilateral agreement as the one between the United States, Canada, and Mexico (USMCA). The fact that USMCA has been replaced by the U. S.-Mexico-Canada Agreement (USMCA) in 2020 has been another element of stress for the American automotive industry.

The government of the United States has negotiated the USMCA with other countries such as Japan and South Korea, which are major vehicle producers for the United States, including 15% of vehicle tax. However, recently there have been reports of resuming commercial negotiations between the United States and Canada, including the handling of critical import duties such as sewing thread. 'Our message is clear: we need that trilateral agreement to maintain the competitiveness of the American automotive industry,' said Thomas. Honda established large operations in Canada, but its vehicle production in America is mainly produced in many assembly plants in America. 'I never expected that the North American region would become such a large competitive advantage zone,' added Thomas, adding that some foreign countries have lower double tariffs rates.