Jennifer Thomas, American Honda's senior vice president of corporate affairs, called the tariff plan "catastrophic for the entire industry." She said so at a Reuters conference in Detroit. Then she said she's "cautiously optimistic."
Both can't be true. Both are.
Here is the plan. Trump threatened in August to double tariffs on Canadian vehicles and parts from 25% to 50% on January 1 if no deal lands. Canada's Prime Minister Mark Carney suspended talks and vowed to match U.S. tariffs dollar for dollar. Talks have since restarted. Everyone is calm now.
Honda is Canada's second-largest vehicle producer, behind Toyota. It also runs U.S. assembly plants that eat Canadian parts all day. Parts cross the border so often they've stopped carrying passports. Now Washington wants to charge a cover fee.
Thomas also said she never thought she'd see North America "put at a disadvantage like this." Japan and South Korea got 15% rates on their vehicles. Canada, the neighbor who lends you the lawnmower, gets 50%.
Meanwhile, U.S. Trade Representative Jamieson Greer declined to auto-renew the USMCA. The deal Trump negotiated in his first term now gets annual check-ups, like a cat with kidney trouble.
Retail traders will read this and buy Honda calls. They'll call it a "catastrophe dip." They will be right about the catastrophe and wrong about the dip.
The chart doesn't care about Jennifer's optimism. The chart doesn't know Jennifer. The chart has never been to Detroit.
Honda spent decades building a supply chain that crosses a border several times per car. Now a deadline on a calendar decides whether that was genius or a clerical error.
January 1 is a Friday. Nothing says "catastrophe" like a long holiday weekend.
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