What Car Brands Might Get Affected by Tariffs in Canada

In early 2025, a wave of new U.S. auto tariffs signed by President Trump shook the global auto industry—and Canada’s car market is now squarely in the crosshairs. With a 25% tariff on foreign-made vehicles and imported auto parts, the cost of building and selling cars across North America is rising fast. Although some trade concessions under USMCA lower the rate to 12.5% for qualifying vehicles, the impact on Canadian car brands and supply chains is unavoidable.

From compact sedans to electric SUVs, virtually every automaker operating in Canada is touched by the new rules. Some brands will pass on costs to consumers. Others may face production delays or even consider scaling back exports. In this article, we explore which car brands in Canada are most affected by the tariffs and why the fallout could reach every corner of the automotive landscape—from dealerships to drivers.

Tesla (Least Affected, but Not Immune)

Tesla may be the exception to the rule when it comes to Trump’s 2025 auto tariffs. All of its vehicles for the North American market are built in the U.S.—in California and Texas—so they bypass the 25% tariff on imported cars. Tesla even manufactures many of its parts in-house, reducing reliance on foreign-sourced components.

However, some battery materials and electronics still come from overseas, including China—triggering the 25% auto parts tariff. While Tesla will see some cost increases, the company is better insulated than most competitors. Its vertically integrated model, combined with growing domestic production, keeps price hikes minimal. Canadian consumers may see slight upticks in Tesla prices, but availability will not be significantly disrupted. Among all brands, Tesla and U.S.-based EV makers like Rivian are positioned to weather the tariff storm best—though they’re still keeping a close eye on rising input costs.

Ford (Moderately Affected) 

Ford is in a relatively strong position due to its substantial U.S. manufacturing base. About 80% of Ford vehicles sold in North America are made in the U.S., including its top-selling F-Series trucks. These models avoid the 25% import tax, though rising costs for imported parts still apply.

However, Ford does build some models in Mexico, including the Bronco Sport and Maverick pickup—both of which now face either a 12.5% or 25% tariff, depending on compliance with USMCA content rules. Additionally, Ford’s reliance on some overseas parts means assembly costs may rise in both the U.S. and Canada. While major factory closures are unlikely, pricing pressures may affect affordability for Canadian consumers. Ford’s balanced production strategy cushions it from the worst outcomes, but its Canadian operations and certain imported models will still feel the pinch.

General Motors and Stellantis (GM/Chrysler) 

GM and Stellantis have significant North American footprints, but their Canadian-made models are directly affected by the new tariffs. The Chrysler Pacifica (built in Windsor, Ontario) and GM pickups from Oshawa must now pay up to 25% in tariffs to enter the U.S.—unless they meet the 50% U.S.-content threshold for the reduced 12.5% rate.

Even U.S.-assembled models aren't entirely safe: both automakers use imported parts, including engines and transmissions, that now cost more under the auto parts tariffs. That raises production costs across the board, including for Canadian-bound cars. Despite pressure from the Trump administration to keep prices low, manufacturers are facing tough choices—absorb the cost or pass it to consumers. GM and Stellantis haven’t announced major changes yet, but the risk of Canadian vehicle price increases and slower inventory turnover is real.

Toyota (Significantly Affected) 

Toyota is one of Canada’s largest automakers, with major plants in Ontario that produce the RAV4, Lexus RX, and other popular models. These vehicles are primarily exported to the U.S., and under the new policy, they could face tariffs of up to 25% unless they qualify for the reduced 12.5% rate.

Toyota also imports many parts from Japan, exposing it to double tariffs—once when the parts enter Canada, and again if the finished vehicle is exported. That makes Toyota especially vulnerable under the new regime. While Toyota is known for efficient supply chains and strong localization, rapid adjustments are difficult. Canadian Toyota dealers may face higher vehicle prices or limited inventory, especially for high-demand models like the RAV4 Hybrid. The company may attempt to shift sourcing and production, but in the near term, Toyota’s Canadian operations are among the hardest hit.

Honda (Significantly Affected) 

Honda, like Toyota, operates large-scale manufacturing in Ontario. Popular models such as the Civic and CR-V are built in Canada and sold extensively in the U.S. These exports now face new tariffs—either 12.5% or 25%—which dramatically affects cost and competitiveness.

Honda’s supply chain is also heavily reliant on Japan, meaning imported parts are more expensive under the auto parts tariffs. This creates a compounding effect: higher input costs plus export taxes. For Canadian consumers, this could mean delayed shipments, rising vehicle prices, and a potential shift in available models. Honda will likely increase North American content in its vehicles over time to qualify for tariff relief, but that’s not an overnight fix. Until then, Honda’s footprint in Canada makes it a central player in the tariff ripple effects felt throughout the industry.

Hyundai and Kia (Cross-Pressured)

Hyundai and Kia import many vehicles from Korea, which are now directly subject to the 25% import tax when entering the U.S. While these brands aren’t made in Canada in large volumes, their North American supply chains and distribution networks are tightly linked—so costs still rise.

Canada often receives the same inventory as the U.S., meaning pricing pressure in one country affects the other. Hyundai is investing heavily in U.S.-based EV production to mitigate future tariff exposure, but that won’t help existing Korean-built models. Affordable crossovers like the Hyundai Venue or Kia Forte could see significant price hikes, pushing them out of reach for budget-conscious Canadian consumers. Hyundai and Kia’s agility may help in the long run, but their Canadian market offerings are under stress today.

Volkswagen and European Luxury Brands (Heavily Affected) 

German carmakers such as Volkswagen, BMW, and Mercedes-Benz are uniquely exposed. Many of their vehicles—and essential parts like engines and transmissions—are imported directly from Europe or routed through Mexico. Under the new tariff regime, these face duties of 12.5% to 25%.

BMW, for example, assembles SUVs in the U.S. but imports engines from Germany. These parts now cost more, pushing up the total price of the finished vehicle. In Canada, the result is rising sticker prices across luxury lineups. Some automakers may redirect inventory away from the U.S. and into Canada to avoid tariffs—but that doesn’t eliminate the cost hikes if vehicles are built with tariffed components. Expect luxury car prices in Canada to rise, especially for newer models. Even brands like Ferrari have announced price increases specifically due to the tariffs, signaling that the effects will be felt across every price segment.

BYD and Chinese Automakers (Strategically Positioned) 

Chinese EV brands like BYD are mostly shut out of the U.S. market, but they see Canada as a potential opportunity amid the tariff fallout. Unlike the U.S., Canada hasn’t banned Chinese car imports, making it an open door for affordable EVs and hybrids—especially as other brands raise prices.

However, large-scale entry of Chinese brands into Canada could backfire politically. Canada has invested heavily in domestic EV manufacturing with Western partners like VW and GM. Embracing Chinese brands may undermine that commitment and hurt Canadian suppliers. Still, if other automakers reduce inventory or raise prices, Chinese brands could gain market share in Canada. For now, Chinese carmakers remain a minor presence, but they may benefit from market gaps created by Trump’s tariffs.

Canadian-Made Models for Export (Systemically Affected) 

Vehicles assembled in Canada and shipped to the U.S.—such as the Chrysler Pacifica and some GM trucks—are facing up to 25% in new tariffs, depending on their U.S. content. This is a major blow to Canada’s manufacturing base, which relies heavily on the U.S. market.

Even with a partial carve-out under USMCA, only vehicles with at least 50% U.S.-made components qualify for the reduced 12.5% rate. That means factories must now trace every part’s origin or risk major financial hits. The impact on Canadian auto exports is substantial: assembly plants may face slower production, reworked supply chains, or even downsizing if they can’t remain cost-competitive. Canada’s government is offering subsidies to cushion the blow, but economic uncertainty is high.

Canadian Consumers (Most Affected Overall) 

Ultimately, the biggest losers may be ordinary Canadian car buyers. With tariffs increasing costs across the board—from vehicle components to finished products—automakers are already warning that prices could rise by $5,000 to $10,000 per car.

Even vehicles made entirely in North America may see price bumps, as companies spread the tariff burden across their lineups. Add in inventory shortages, production delays, and potential retaliatory tariffs on U.S. imports, and Canadian car prices are poised to spike. Some analysts predict a 25% drop in Canadian new car sales in 2025 as a result. This may lead to dealership layoffs and regional economic pain, especially in auto-reliant communities. In short, the Trump tariffs are triggering a ripple effect that lands hardest on the consumer—regardless of which brand they buy.

Answering Your FAQ’s

What car brands will be most affected by tariffs in Canada?

Toyota, Honda, Volkswagen, Hyundai, and GM are among those most impacted due to export dependencies and imported parts.

Will car prices go up in Canada because of U.S. tariffs?

Yes. Analysts estimate a potential $5,000–$10,000 increase per vehicle, even for some Canadian-made models.

Are any car brands safe from the tariffs?

Tesla and some U.S.-built Ford models are relatively insulated, but no brand is completely untouched.

Why is Canada affected by U.S. tariffs? 

Canada and the U.S. have a deeply integrated auto supply chain—tariffs on cross-border trade hit both sides.

Could Chinese brands gain ground in Canada?

Possibly. With other brands raising prices, affordable Chinese EVs may find new opportunities in the Canadian market.

How Tariffs Are Steering Canada’s Car Market

The 2025 auto tariffs introduced by the U.S. government have sent shockwaves through the Canadian automotive landscape, impacting everything from manufacturing costs to consumer pricing. Brands that rely on cross-border production—like Toyota, Honda, and Volkswagen—are facing steep financial hurdles, while even U.S.-based companies like Ford and GM are contending with rising parts costs and export restrictions. Canadian-made vehicles aren’t immune either; many now face new barriers when entering the U.S., disrupting long-standing trade flows and production cycles.

As the situation evolves, automakers are racing to adapt—shifting supply chains, exploring domestic sourcing, and reassessing their North American strategies. Meanwhile, the Canadian government is stepping in with support plans and retaliatory measures aimed at preserving competitiveness and affordability. For everyday Canadians, however, the immediate result is likely to be fewer choices and higher prices at the dealership. In the months ahead, the true impact of these tariffs will become clearer—but one thing is certain: the rules of the auto industry have changed, and Canada is bracing for a costly road ahead.