Canada-US Automotive Trade Dynamics
Cross-Border Used Car Trade
of Canada's used car market is shipped to the United States
The automotive trade relationship between Canada and the US is deeply integrated:
- About 76% of Canada's manufacturing — including autos — goes to the U.S.
- In 2024, the United States was the destination for 75.9% of Canada's total exports
- The US was the source of 62.2% of Canada's total imports in 2024
- Used luxury vehicles are particularly common in the cross-border trade
Key Vulnerability:
The significant percentage of Canadian used cars exported to the US makes this segment particularly vulnerable to tariff impacts.
Integrated Supply Chain
The North American automotive supply chain is highly integrated across all three USMCA countries:
- Mexico and Canada are the United States' top trading partners for automotive goods
- Both countries together account for nearly half of US imports and exports of motor vehicles and parts
- An engine, transmission, or other automotive component might cross the US-Canada and US-Mexico borders as much as seven or eight times before it ends up in a finished vehicle
- This integration makes the supply chain particularly vulnerable to tariff disruptions
Industry Perspective:
"You just can't relocate automotive production and the supply chain overnight," said John Bozzella, CEO of Alliance for Automotive Innovation.
Value-Added Contributions
of the foreign value-added embedded in vehicles imported by the United States from Mexico is US-made content
of the total value-added of vehicles imported to the United States from Mexico was American-made
The value chain in North American automotive production is deeply interconnected:
- Canada and Mexico account for nearly 40 percent of all US imports of steel mill products
- Over half of US imports of flat steel, which is used extensively in the automotive industry, come from Canada and Mexico
- Canadian parts are essential components in many "American-made" vehicles
- The integrated nature of production means tariffs often impact domestic producers as well as foreign ones
Regional Economic Importance
The automotive sector has significant regional importance in Canada:
- Ontario is Canada's automotive manufacturing hub, with 28.9% of Ontario's exports being auto-related
- The automotive sector employs approximately 135,000 Canadians directly
- Border regions have particularly strong economic ties to the automotive trade
- Many Canadian communities are heavily dependent on the automotive industry for employment and economic activity