Trump's tariff threats revive long-dead idea that Canadian auto sector can go it alone

The Liberal Leader said Canada ’s auto sector would need to be reimagined to survive American tariffs.

The 1965 auto pact cemented the integration of the two countries’ auto sectors that was cemented by the 1965 pact.

Around 85 per cent of the vehicles manufactured in Canada are exported to the U.S. and they would likely no longer be competitively priced if the tariffs are implemented.

The tariffs alone are likely to spur more than 2,000 layoffs and reduce auto exports in 2025 by six per cent or $550 million , analysts say.

Canada ’s current export-based model of auto manufacturing has led to a sector in decline, one that is shedding manufacturing capacity and running a trade deficit.

In 2024 , auto production in Canada was just under 1.3 million vehicles.

China ’s auto sector in 2024 produced more vehicles than any other country for the first time.

China 's exports have rapidly grown to six million vehicles in 2024 from one million in 2020 .

In Canada , vehicles rank as the country's second -largest export, valued at $51 billion , so a collapse could send ripples through the economy.

There are lingering concerns and questions about how long such tariffs could persist.