TORONTO – A new report from TD highlights how Canada and the U.S. have balanced trade in the automotive sector while moving production fully to the U.S. could cost auto producers an estimated US$50 billion.
The report comes as the clock ticks down on the potential for the U.S. to impose 25 per cent tariffs on imports from Canada as soon as Feb. 1.
U.S. President Donald Trump has complained about the trade imbalance with Canada and said U.S. automakers should build their vehicles in Detroit.
TD notes that Canada’s share of auto production has been in retreat for years, leading to an equal value of light vehicles and parts being traded between Canada and the U.S.
Mexico, however, has seen its share of North American auto production climb, even as it buys an increasing volume of vehicles from China, leaving the U.S. with a US$106 billion automotive trade deficit with Mexico in 2023.
TD says the upwards of US$50 billion cost of moving seven million to eight million units in production back to the U.S. would likely be borne by the private sector, and so would be passed on to American consumers.
This report by The Canadian Press was first published Jan. 28, 2025.
