US auto market share in Canada hits record low on tariff turmoil
U.S. factories’ share of the Canadian vehicle market has tumbled to a new low, as automobile tariffs upend an industry that for decades enjoyed tight cross-border integration.
Just 36% of passenger vehicles imported to Canada were manufactured in the U.S. during the first 10 months of 2025. That compares with an average of 49% in the 10 years before that, according to Statistics Canada imports data.
Canada is the largest buyer of American-made new cars and trucks, by far. But the numbers help illustrate how the trade war started by President Donald Trump’s administration has changed the business. Mexican and South Korean-made vehicles are gaining a bigger share of sales at Canadian auto dealers.
Trump put tariffs on foreign-made vehicles in April, prompting Canada to retaliate with tariffs on U.S. cars and trucks. But the Canadian government grants some exemptions for automakers that still produce vehicles in Ontario, such as Toyota Motor Corp. and General Motors Co.
“A number of manufacturers paused imports into Canada of certain U.S.-built models, and others shifted sourcing to other countries,” said Andrew King, managing partner of DesRosiers Automotive Consultants Inc.
The firm’s data indicates that Tesla Inc. has begin shipping cars into Canada from its German plants, getting around Canadian tariffs. Subaru Corp. is another example, King said. “They have changed sourcing to import more product from Japan and less from the U.S.” Neither Tesla nor Subaru assembles vehicles in Canada, so their U.S.-made products are subject to Canadian counter-tariffs.
The Canadian auto sector has been roiled by the trade war. Stellantis NV canceled plans to make its Jeep Compass in Ontario in favor of an Illinois plant, keeping thousands of workers on layoff. The company was then served a default notice by the Canadian government, which says the automaker violated earlier agreements that it signed to receive taxpayer assistance.
In October, GM said it is ending the production of electric delivery vans at a different Ontario plant. Honda Motor Co. postponed plans to invest $11 billion to build out its Canadian EV supply chain.
U.S. market share in Canadian auto imports was already declining, outpaced by aggressive growth in imports from Mexico, South Korea and Japan. Demand for Tesla EVs drove a fourfold increase in vehicle imports from China in 2023. But then Canada imposed a 100% tariff on Chinese EVs in October 2024, which cut that country’s market share to just 1.3%.
On Friday, Canadian Prime Minister Mark Carney said he had reached an agreement with China that alters that policy. Canada will allow in a small number of Chinese electric vehicles at a much lower tariff rate – around 6% – in return for China lowering its tariffs on Canadian canola.
Through October, the value of Mexico’s auto exports to Canada had already exceeded the record high for a calendar year at $6 billion.
U.S.-made cars accounted for 70% of Canadian passenger vehicle imports in the 1990s and gradually slipped in the following decades as challengers expanded their exports.
Bloomberg’s analysis of the Statistics Canada data checked HS codes beginning with the digits 8703, which comprises passengers cars, light trucks and minor categories such as golf carts and snowmobiles.