Canada is popping to Mexico for cars amid tariffs, with imports from Mexico surpassing these from the US for the primary time in 30 years this June. Roughly C$1.08 billion in passenger autos have been despatched from Mexico to Canada in comparison with C$950 million from the US throughout that very same time interval, as famous by Statistics Canada.
All automobile imports to Canada rose by 6.9% in June after two consecutive months of contraction. Imports of components and engines, nonetheless, declined by 4.8% as motorcar manufacturing in Canada is starting to wane. As for imports, Canada was the highest purchaser of US autos in 2024.
Canada’s auto manufacturing business is immediately tied to the US as nearly all of factories are producing American-owned manufacturers reminiscent of Ford and Common Motors. The truth is, Canada was as soon as the world’s prime auto exporter. Auto exports from Canada fell 14% in 2024 on an annualized foundation, though complete automobile gross sales have been up 8.2% at 1.86 million items. The auto sector contributed C$16.5 billion to Canadian GDP in 2024 whereas producing C$46.5 billion in exports. The broader auto sector in Canada accounted for 4% of complete GDP in 2024 at C$94 billion.
Roughly 603,500 Canadians are employed by way of the auto business, with 130,000 employees particularly concerned in manufacturing. Auto manufacturing was off to a powerful begin in 2025 as a result of pre-tariff panic spending and Canada, however gross sales have slowed in current months with June’s information exhibiting a 7.5% month-to-month lower in annualized gross sales.
The demand for electrical autos can be waning. Zero-emission autos (ZEV) gross sales fell 35.2% in June on a yearly foundation, though ZEVs compose solely 7.9% of all automobile gross sales. Canada is upholding its net-zero mandate, requiring all new automobile gross sales to be ZEV by 2035, however customers don’t need to make the swap but.
America-Mexico-Canada Settlement (USMCA, additionally referred to as CUSMA in Canada) exempts all autos that adjust to the settlement from the 25% tariff. USMCA-compliant imports are levied solely on their non-US parts. Canada carried out a retaliatory 25% tariff on US autos and all of those levies are disrupting commerce and growing prices quickly. Canada additionally carried out a $2 billion remission program to complement Canadian automakers throughout these risky occasions. Will Canada proceed to buy extra from Mexico than the US or will this be a brief adjustment amid the tariff video games?
