Is Canada’s automotive industry at a crossroads?

As negotiations between the US and its many trade partners continue, Canada’s position, especially in automotive, is fraught with uncertainty. By Ian Henry

Despite signing the USMCA trade deal during his first presidency and hailing it as a great success, US President Donald Trump effectively tore this up soon after taking office again in January 2025. Vehicles and components sourced in Canada are subject to a 25% tariff, although vehicles and components which comply with the rules of origin protocols in USMCA can obtain at least partial relief. However, this is not sure to last, and with the US and Canada still negotiating new arrangements, existing and future automotive manufacturing operations in Canada are under strain.