Brian Kingston, President and Chief Executive Officer of the Canadian Vehicle Manufacturers’ Association (CVMA), called on Monday for a return to tariff-free trade under the United States-Mexico-Canada Agreement (USMCA), saying tariffs were eroding the North American auto industry.
“Tariff costs on the auto industry are mounting,” Kingston wrote on X.
He said the result was lower production and exports, higher prices and a less competitive North American industry.
“Restoring USMCA tariff-free trade would strengthen the industry across Canada, the U.S., and Mexico,” he wrote.
The CVMA represents the Canadian units of Ford, General Motors and Stellantis.
Kingston had called tariffs “a self-inflicted economic wound” on September 22, when he shared JD Power Canada data showing US-built vehicles fell to 28.4% of Canadian new-vehicle sales in the first half, from 35.4% a year earlier.
His Monday post came as the United States and Mexico open a negotiating round in Washington, and three months before US tariffs on Canadian cars, trucks and parts are set to double to 50% on January 1.
Exports
Official Canadian trade data support the export claim.
Canada exported C$29.0 billion ($20.5 billion) of passenger cars and light trucks in the first seven months of 2026, down 13.7% from C$33.6 billion ($23.7 billion) a year earlier, according to Statistics Canada data on a balance-of-payments basis, not seasonally adjusted.
Exports of motor vehicles and parts fell 9.7% to C$49.6 billion ($35.0 billion) over the same period.
Parts exports rose 2.5%, so the decline came from finished vehicles. Imports moved the other way.
Canada imported C$47.3 billion ($33.4 billion) of passenger cars and light trucks from January to July, up 8.4% from a year earlier.
Imports of motor vehicles and parts reached a record in July, Statistics Canada said.
Most of the gain went to non-US suppliers.
Mexico’s share of Canadian new-vehicle sales rose to 22.2% in the first half from 18.3%, Japan’s to 16.6% from 13.7% and South Korea’s to 15.6% from 14.6%, according to JD Power Canada.
US motor vehicle exports to Canada fell about 22%, to about $20.3 billion from $25.9 billion, between April 2025 and March 2026, according to a presidential proclamation signed on July 20.
The United States still runs a surplus in auto trade with Canada.
It imported $24.5 billion of Canadian vehicles and parts in the first half, while Canada imported $30.4 billion of US vehicles and parts, according to Commerce Department data.
Production
Canadian vehicle output fell about 64,000 units, or 15%, through April from a year earlier, while US output rose about 44,000 units, or 1.2%, Center for Automotive Research Chief Economist Tyler Harp said in June, according to Carscoops.
Canadian light-vehicle assembly fell to about 1.2 million units in 2025 from 1.3 million, according to DesRosiers Automotive Consultants.
TD Economics forecast in February that Canadian production would fall about 4% in 2026 after a 5.4% drop last year, as automakers shift some output to the United States.
GM halted production at its CAMI plant in Ingersoll, Ontario, after cancelling the BrightDrop electric delivery van, according to Carscoops.
Stellantis added a third shift at its Windsor, Ontario, assembly plant in February.
Stellantis told Unifor in August it is seriously considering the closure and sale of its Brampton, Ontario, plant, which has been idle since the company moved Jeep Compass production to Illinois.
Canada produced 1.2 million vehicles over the past 12 months while selling 1.9 million, making it a net importer, BMO Capital Markets Chief Economist Douglas Porter wrote this month.
Prices
The price claim is weaker in official inflation data than in industry estimates.
Tariffs added about $30 billion in costs in their first year and lifted the average US sticker price 10.4%, according to a Kelley Blue Book analysis reported by CBT News in March.
Buyers paid 5.9% more on average as dealers absorbed part of the increase, according to the analysis.
The US consumer price index for new vehicles rose 0.6% in August from a year earlier and 0.9% from March 2025, the month before the auto tariffs took effect, according to Bureau of Labor Statistics data, not seasonally adjusted.
In Canada, the price index for new passenger vehicles rose 1.4% in August from a year earlier, less than half the 3.0% rise in overall consumer prices, according to Statistics Canada.
The official indexes adjust for changes in vehicle features and content, which can dampen measured price increases.
Tariff Costs
GM paid $3.1 billion in gross tariff costs in 2025, and expects $2.5 billion to $3.5 billion this year.
Stellantis estimates a net tariff headwind of €1.0 billion to €1.2 billion ($1.1 billion to $1.4 billion) in 2026, the company said on July 30.
Tariffs had cost automakers at least $35.4 billion by mid-March, including $6.5 billion for GM, Ford and Stellantis combined in 2025, Automotive News calculated.
USMCA
The United States declined to renew the USMCA for a new 16-year term at its July 1 joint review.
The pact stays in force but now faces annual reviews through 2036.
Vehicles that meet USMCA rules have paid the 25% US Section 232 tariff only on their non-US content since April 2025.
The Tax Foundation estimated in June that removing USMCA tariff exemptions would raise $466 billion in taxes from 2027 to 2036 and cost the equivalent of 95,000 full-time jobs.
US-Canada talks collapsed on August 21 after Canada rejected a US offer to cut the vehicle tariff to 15% that excluded medium- and heavy-duty trucks.
Prime Minister Mark Carney said US demands would have left core Canadian industries as effective subsidiaries of US companies or wound them down.
Separate US tariffs of 50% on about $19.3 billion of Canadian goods, announced in July, took effect on August 22 after Trump delayed them from August 19.
They exclude vehicles and parts already covered by Section 232.
President Donald Trump said on August 24 that tariffs on Canadian cars, trucks, parts and steel would rise to 50% from January 1, and later said he wanted “no Canadian cars.”
Canada spared autos in counter-tariffs on C$27.6 billion ($19.5 billion) of US goods that took effect on September 8, while keeping its existing 25% tariffs on US vehicles.
A US tariff on Canadian parts would be paid by US assembly plants, Flavio Volpe, President of the Automotive Parts Manufacturers’ Association, said this month.
