Auto Industry Holds Steady Amid Rising Canada-US Trade Tensions
The Canada-US trade conflict remains unstable, with a new threat of 35% tariffs on potentially non-CUSMA Canadian goods adding to uncertainty. The automotive sector, a frequent target in this dispute, continues to face challenges. In response to U.S. tariffs, Canada imposed counter-tariffs on U.S.-built light vehicles on April 9, 2025, but granted confidential Remission Orders to five automakers that build vehicles in Canada.
According to DAC, U.S.-built vehicles made up 39% of Canadian light vehicle sales in Q2 2025, down slightly from 41% in Q1. When excluding the five protected manufacturers, U.S. vehicles represented just 7% of sales, down from 9%. The minimal shift reflects a cautious “wait and see” industry response and reliance on pre-tariff inventory.
Andrew King of DAC noted that the true impact of the counter-tariffs may be less severe than anticipated but warned of uneven effects, with specific brands like Mazda and Nissan already halting imports of some models. Further disruptions and price hikes are expected if the trade tensions persist. DAC provides detailed market forecasts to track these developments.
Auto Industry Avoids Shutdown as Tariff Exemptions Ease Pressure, but Uncertainty Looms
Three months after the U.S. enacted 25% tariffs on global vehicle imports, the North American auto industry continues operating with only a slight production slowdown, avoiding the predicted shutdowns thanks to key exemptions and limited implementation of the tariffs.
New-Vehicle Market Sees Rising Inventory and Steady Prices Amid Tariff Uncertainty
Despite concerns over tariff-driven price hikes, new-vehicle prices have remained largely flat, with the average listing price at the end of June slipping just $84 to $48,749 and average transaction prices inching up by only $108.