From：Internet Info Agency 2026-08-28 13:10:29
Recently, Trump stated on social media that due to the massive trade deficit, the U.S. would impose an additional 50% tariff on automobiles and steel produced in Canada starting in 2027 (with models manufactured domestically in the U.S. exempted), adding that Canada is more dependent on the U.S. market. The following day, the Canadian government announced retaliatory tariffs on approximately $20 billion worth of U.S. goods, effective September 8, along with a concurrent $5.4 billion assistance package for businesses and workers. Just a week earlier, the U.S. and Canada had still been negotiating to lower the maximum tariff on Canadian-made vehicles entering the U.S. from 25% to 15%, while also considering halving steel and aluminum tariffs. However, talks between the two sides broke down in August. Amid policy uncertainty, automakers have already begun adjusting their production footprints. Stellantis suspended renovation plans for its Brampton, Ontario plant in early 2025 and is now considering closing and selling the facility, shifting production of the Compass model to the U.S. Although the restart of production at its Belvidere, Illinois plant has been delayed until 2028, the company has increased its renovation budget and confirmed it will produce a new Jeep model there. Toyota has shifted some Tacoma pickup production back to the U.S. from Mexico; Honda moved hybrid Civic production from Mexico to Indiana; and General Motors has also adjusted production locations for multiple models. Following the U.S. decision to raise tariffs on vehicles imported from Mexico and Canada, Mexico’s advantage as a hub for vehicle exports to the U.S. has diminished, leading to a decline in Mexican auto exports to the U.S. in 2025. Meanwhile, the U.S. is renegotiating trade terms with other auto-exporting countries to secure more favorable tariff rates. Chinese automakers BYD and Geely previously participated in bidding for Mexico’s COMPAS plant, but products from this facility face multiple barriers to entering the U.S. market. Canadian auto output continues to decline, with model allocations being reshuffled in response to changing tariff policies. Canada is increasingly leveraging market access to secure investment and local production commitments from automakers, making model relocations a key tool in the bilateral competition for investment and jobs. New U.S. rules require a higher proportion of a vehicle’s value to originate from North America. If fully implemented, these rules would significantly raise costs for automakers and reshape inter-company partnerships. At the supply chain level, adjustments to final vehicle assembly lines are proceeding faster than those involving parts suppliers, who face multiple challenges—including infrastructure and labor constraints—when relocating operations. Currently, the “reshoring” of U.S. auto manufacturing is primarily reflected in capacity expansions at existing plants. Mexico’s share of U.S. automotive parts imports has risen, thanks to its infrastructure and labor advantages. Overall, North America’s auto industry is tilting further toward the U.S. in terms of final assembly, investment, and influence, though critical components such as engines continue to flow among the U.S., Canada, and Mexico, indicating the industry remains integrated rather than fully fragmented.
