How counter tariffs are impacting the Canadian vehicle market

As Canada’s trade standoff with the U.S. drags on, automakers are starting to feel the pressure — but for now, most are still holding their ground, according to a new analysis.

DesRosiers Automotive Consultants reported last week that U.S.-built light vehicles accounted for roughly 39 per cent of new vehicle sales in Canada during the second quarter of 2025, down slightly from 41 per cent in Q1. When excluding the five automakers that build vehicles in Canada — making them exempt from counter-tariffs — that share drops to just 7 per cent, down from 9 per cent.

Canada imposed counter-tariffs on U.S.-built light vehicles in April in response to earlier U.S. tariffs but granted confidential Remission Orders to the five automakers with Canadian production. That move has helped blunt the immediate impact, but uncertainty remains high — especially with the threat of new 35 per cent tariffs on potentially non-CUSMA Canadian goods now looming.

“While the remission orders mean that the exact extent of the Canadian counter tariffs on U.S. vehicles are unclear, the actual reach of the counter tariffs may be somewhat more limited than was feared months ago,” said Andrew King, managing partner at DesRosiers. “However, these pressures are not evenly split and there will be significant pain points for specific brands and models.”

So far, most automakers appear to be taking a “wait and see” approach, relying on pre-tariff inventory and holding off on major sourcing changes. But cracks are starting to show. Mazda has paused imports of the CX-50, and Nissan has done the same with the Pathfinder — both built in the U.S. and now subject to tariffs when shipped to Canada.

DesRosiers warned that more disruptions and price hikes could follow if the trade conflict continues without resolution.

“As the random outbursts from the US administration continue, industries are left guessing as to the pace and effects of these indiscriminate threats — and trying to formulate strategy in a world of constantly changing rules,” the report said. “The automotive industry, a key target throughout this trade conflict, has been no different.”