On the Dash:
For the first time in 30+ years, Canada imported more vehicles from Mexico than from the U.S., signaling shifts in North American trade.
Trump’s 25% tariffs are forcing automakers to adjust production, sourcing, and pricing strategies.
Canada’s retaliatory tariffs and incentives for domestic production are changing how U.S. automakers serve the market.
Canada imported more vehicles from Mexico than from the United States in June, marking the first time in more than 30 years that Mexican-made cars outsold U.S.-made models in the Canadian market. Canadian importers brought in C$1.08 billion ($784 million) of passenger vehicles from Mexico, surpassing C$950 million from the U.S., according to Statistics Canada.
The shift highlights the growing impact of President Donald Trump’s 25% tariffs on foreign vehicles, which have disrupted the long-standing flow of cars and parts across North America. While vehicles shipped under the U.S.-Mexico-Canada Agreement face tariffs only on non-U.S. content, the relief has done little to mend strained trade relations. In retaliation, Canada imposed tariffs on U.S.-assembled vehicles while providing exemptions for automakers that maintain domestic production and investment.
Canada’s changing import patterns may signal broader shifts for the U.S. auto industry. The country is the largest buyer of U.S.-made cars and light trucks, and American exports to Canada, including parts, exceeded sales to Germany, Mexico, and China combined in 2024, according to the U.S. Commerce Department.
Automakers such as General Motors and Ford have traditionally served Canada with U.S.-built vehicles. Ford currently produces nothing at its Ontario plant but plans to begin manufacturing F-Series Super Duty pickups there next year.
Mexico’s recent rise as Canada’s top vehicle exporter could be temporary. Earlier in 2025, Canadian imports of U.S. autos spiked to an average of C$2.5 billion in February and March as companies rushed shipments ahead of the tariffs, compared with last year’s monthly average of just over C$1.8 billion.
Major automakers have largely avoided passing tariff costs onto consumers. Instead, they have shifted production to the U.S. or adjusted supply chains to prioritize American-made vehicles. Meanwhile, the U.S. continues negotiating auto trade terms with partners including the European Union, Japan, and South Korea, though details remain incomplete.