It’s not enough to make tariffs a good thing, but if they happen anyway, it’s something to consider
Canada exports between 10 and 15% of its used vehicles to the U.S. annually. Our considerably weaker dollar has long made our used stock — especially the highly coveted luxury, SUV, and truck sector — very attractive.
But with the threat (or promise, depending on which side of the fence you’re on, I guess?) of tariffs coming from an unpredictable new administration, shockwaves would be sent through Canada’s auto industry. I spoke with Daniel Ross, senior manager at Canadian Black Book in charge of Industry Insights & Residual Value Strategy about those tariffs in a wide-ranging interview exploring what the coming year holds for Canadians from an automotive perspective.
American tariffs — Trump proposed 25% — would have a devastating impact on the Canadian auto industry at every level. Our supply chains are entwined with American ones, and parts used in the assembly of vehicles produced here often go back and forth across the border multiple times. To subject each of these transactions to tariffs would be crippling. Is there any glimpse of a silver lining for consumers?
From a consumer perspective, this could be a dual-edged sword. You want a high retained value. If that “severely declines,” your car is worth less. But if a huge swath of our used inventory stays put, prices on used vehicles would be driven down. Depending on where you sit on the car buying/owner spectrum, this might be a window of relief for people who have been unable to find one since before the pandemic. It’s not enough to make tariffs a good thing, but if they happen anyway, it’s something to consider.
How does politics impact the auto industry?
Ross notes how politics deeply impacts the auto industry. A change in government makes the resumption of Quebec subsidies a toss-up. If a change at the federal level strips out those subsidies, does Quebec — by far the biggest adopter of EVs in Canada — raise their subsidy back up, or scrap it altogether?
“OEMs are huge machines that must move forward,” says Ross. “It’s a tough time to be a president of an OEM right now. Decisions are based on data, and we just don’t have the data.” The elephant in the room, of course, is that political decisions are increasingly not based on data. How is an industry that relies on it supposed to set its sails?
“This is the time for Canada to stake their claim as a global leader.” – Daniel Ross
China is building large quantities of high-quality EVs. Tariffs are intended to fend them off from coming here, but realistically, can that happen? “North America will eventually be susceptible to these cars,” says Ross. “In terms of what domestic manufacturers are doing overseas, their best days there are behind them…Chinese manufacturers are making good quality tech-laden cars that could very easily be sold over here.” Tariffs protect domestic manufacturers from an unfair advantage of the Chinese labour market (Unions? Human rights?), but Ross sees a future with Chinese cars built here, as well as Mexico. “If they talk to our political leaders and accept tariffs and make them equivalent in price, if we can address issues around things like security, why not bring them here and give consumers another avenue of choice?”
And keep an eye on the used market.
Sign up for our newsletter Blind-Spot Monitor and follow our social channels on X, Tiktok and LinkedIn to stay up to date on the latest automotive news, reviews, car culture, and vehicle shopping advice.