By Nathan Gomes and Kalea Hall

May 2 (Reuters) - General Motors' GM.N Oshawa Assembly plant in Canada, which builds pickup trucks, will cut back to a two-shift schedule from three due to softening demand and trade-related challenges, the company and the union representing workers said on Friday.

U.S. President Donald Trump's tariff policies have rattled the automotive industry, forcing them to rethink where they source their parts from as well as production output.

The Oshawa plant assembles light and heavy-duty Chevrolet Silverado pickup trucks for the North American market. These vehicles are also assembled at factories in the U.S. and Mexico.

Unifor, which represents about 3,000 members at the Detroit automaker's Oshawa assembly plant, said GM's decision to reduce operations was "reckless".

GM is increasing production output at its light-duty truck plant in Fort Wayne, Indiana, which Reuters first reported.

It intends to reduce Oshawa truck exports to the U.S. and recalibrate the plant for Canadian sales, starting in the fall.

The automaker said the move would impact around 700 employees but did not provide any further details. GM said it would work with partners to support employees through the transition.

Ontario Premier Doug Ford on Friday called the announcement "extremely tough" for impacted employees.

Last month, GM said it would temporarily halt production of electric commercial vans at its assembly plant in Ontario and temporarily lay off some workers over slow sales.

(Reporting by Nathan Gomes; Additional reporting by Kalea Hall; Editing by Krishna Chandra Eluri)

((Nathan.Gomes@thomsonreuters.com;))