President Donald Trump’s threat to impose 25% tariffs on imports from Canada threatens to upend the automotive sector on both sides of the border. But does it mean those that were looking to have their vehicles transported from the US to Canada or the other way round need to start panicking? The answer is a massive YES! The tariffs were initially deferred for a month on 03 February 2025. That month will soon run out. In this post, we talk about why you need to ship your car now before President Trump’s 25% tariffs on Canada come into effect.
Trade between the US and Canada’s automotive sector is massive
First, we will make one thing clear; trade between the United States and Canada is massive. In fact, the two country’s are each other’s biggest trading partners. Much of this trade happens in the automotive sector. In the table below, we show the value of the trade between the United States and Canada for the year 2023.
| Sector | U.S. Exports to Canada (in billions USD) | U.S. Imports from Canada (in billions USD) |
|---|---|---|
| Vehicles (excluding railway, tramway) | $57.73 | $65.10 |
| Machinery, nuclear reactors, boilers | $52.76 | $33.50 |
| Electrical, electronic equipment | $29.41 | $20.30 |
| Mineral fuels, oils, distillation products | $28.68 | $90.20 |
| Plastics | $15.41 | $12.80 |
| Optical, photo, technical, medical apparatus | $10.60 | $7.50 |
| Aircraft, spacecraft | $8.73 | $9.20 |
| Articles of iron or steel | $7.48 | $6.90 |
| Pharmaceutical products | $5.87 | $4.30 |
| Paper and paperboard, articles of pulp | $5.81 | $5.60 |
As you can see, the biggest sector is the auto industry. President Trump’s threat of tariffs is real. It’s likely to have a huge impact on those looking to move their vehicles across the U.S Canadian border. Let’s say you have bought a car in the U.S and you wish to transport it to Canada.
Or maybe you inherited a vintage car in Canada and you wish to bring it to the United States. If you fall into these and other categories, you need to get in touch with US Canada Auto Transport right now. We will ensure that you avoid the tariffs by getting your car shipped as soon as possible.
Why you should panic act right now
If you plan to ship a vehicle between the U.S. and Canada, now might be the time to panic act—before tariffs make it significantly more expensive. In light of President Donald Trump’s recent reelection and his renewed focus on protectionist trade policies, a proposed 25% tariff on automobile imports and exports between the United States and Canada is on the horizon. But why should people looking to ship their vehicles worry?
Why Should You Worry?
- Higher Costs on Vehicle Imports
If these tariffs come into effect, shipping your car across the border will likely come with a big financial premium. We have already noted that trade between the 2 countries is mostly in the automotive sector. A 25% tax would drive up prices for imported vehicles, impacting buyers and sellers alike. - Supply Chain Disruptions
Auto manufacturers rely on seamless cross-border trade. In fact, the automotive industry between the United States and Canada is so integrated that parts are made in one country and usually assembled in another. If tariffs hit, expect delays and price hikes as companies adjust to new costs. - Limited Time to Avoid the Spike
If you’re considering shipping a vehicle, acting before tariffs take effect could save you thousands. Carriers might experience a rush of last-minute shipments, making early action even more crucial. Get in touch with us at US Canada Auto Transport to learn how you can save yourself the trouble by shipping your car before the tariffs come into effect. - We are also worried
Auto shipping companies have been hit hard by the threat of tariffs, and we, at US Canada Auto Transport have also been affected. However, we remain the best option for those looking to ship their vehicles from Canada to the US or the other way round.
What Can You Do?
- Ship Your Car Now: If you’re on the fence, don’t wait. Lock in a shipping deal before potential tariffs take effect. Talk to us to get started.
- Stay Informed: Trade policies change fast. That’s particularly the case when it comes to President Trump. It’s more than likely that we will have other chapters in this fast moving tale before the issue is settled one way or the other. Keep an eye on government announcements to avoid sudden cost increases.
- Consider Alternative Options: If tariffs go into effect, it might be cheaper to buy or sell your car within the same country rather than import/export it. So, if you are in Canada, consider buying your vehicle locally. If you are in the United States, consider doing the same. True, shipping costs are still likely to increase should tariffs be imposed, but at least you won’t have to worry about shipping costs.
Expect significant price increases
If the U.S. imposes a 25% tariff on vehicles imported from Canada, the price increase for consumers will depend on several factors, including how much of the tariff cost is passed on by automakers, supply chain adjustments, and domestic production capacity. However, estimates suggest the following:
- Direct Price Impact:
- A 25% tariff on Canadian-made vehicles could increase vehicle prices by $5,000 to $10,000 per car for those models that are fully imported.
- Luxury vehicles and trucks, which often have higher price points, could see even steeper increases.
- Effect on U.S. Manufacturing:
- Many U.S.-assembled vehicles rely on Canadian parts and components. If tariffs are also applied to auto parts, this could drive overall vehicle prices up across the board, not just for Canadian imports.
- Even U.S.-made vehicles could become $1,000–$2,000 more expensive due to higher costs for parts.
- Industry-Wide Impact:
- Canadian automakers (like those producing in Ontario for U.S. brands) could shift production or pass costs onto U.S. consumers.
- Some U.S. automakers might absorb part of the tariff to stay competitive, but this would likely result in job losses or plant closures to offset costs.
Estimated Price Increases by Brand (If 100% of Tariff Is Passed to Consumers)
| Brand | Affected Models (Made in Canada) | Estimated Price Increase ($USD) |
|---|---|---|
| Ford | Edge | $8,000 – $10,000 |
| GM (Chevrolet, GMC, Cadillac) | Chevrolet Equinox, GMC Terrain, Cadillac XT4 | $6,000 – $9,000 |
| Chrysler (Stellantis) | Chrysler Pacifica, Dodge Charger/Challenger | $7,000 – $10,000 |
| Toyota | RAV4, Lexus RX | $5,000 – $8,000 |
| Honda | CR-V, Civic (some trims) | $4,000 – $7,000 |
| Volkswagen | None (Minimal impact) | No major impact |
Key Takeaways
- Ford, GM, and Chrysler (Stellantis) face the biggest impact, as they have multiple high-volume models made in Canada. We have already noted that high-end vehicles will be impacted the most.
- Toyota and Honda will also see major price increases, especially for popular models like the RAV4 and CR-V.
- Luxury vehicles like the Lexus RX and Cadillac XT4 will see even bigger increases due to their already higher price points.
- Volkswagen and some other European brands will see minimal impact since they import from Mexico, Europe, or U.S. plants instead. However, there is a possibility that the tariffs will be extended to these countries as well
The Benefits of Shipping Your Car Now
It’s wise to ship your vehicle before the tariffs come into effect. The following are some of the benefits of doing so;
1. Financial Savings
By acting quickly, you can save thousands of dollars. As illustrated above, the potential price increases make it imperative to get your car across the border before tariffs come into play. Additionally, shipping costs are expected to rise, so it’s wise to secure your shipping service at current rates.
2. Avoiding Market Fluctuations
The automotive market is highly volatile, especially during periods of uncertainty like tariff discussions. By shipping your car now, you can avoid the fluctuations that typically accompany such changes. This stability can be beneficial for both buyers and sellers.
3. Flexibility in Choice
Shipping your car before tariffs come into effect provides you with greater flexibility in choosing a vehicle. You’ll have access to a wider range of options without the constraints imposed by rising prices or limited availability.
Will President Trump Change His Mind?
While it’s easy to assume that once a tariff is proposed, it will be implemented, the reality can be more complex. That’s particularly the case when it comes to President Trump. Yes, he has threatened to impose 25% tariffs on Canada, but he may yet change his mind.
Historically, trade negotiations have been fluid, with positions changing based on various factors, including economic conditions and political pressures.
While there is always a possibility that President Trump could reconsider his approach, it seems unlikely that he would backtrack on the proposed tariffs without significant concessions from Canada. The administration’s focus on protecting American manufacturing suggests that they may be committed to enforcing these tariffs.
Potential Retaliation from Canada
Canada has made it clear that it will retaliate against any tariffs imposed on its exports. This could lead to an escalating trade war, impacting not only the automotive industry but also other sectors, such as agriculture and manufacturing. Tariff disputes can have far-reaching consequences, potentially affecting consumers and businesses on both sides of the border.
The potential for an escalating trade war looms large if tariffs are implemented and retaliatory measures follow. A cycle of tariffs could lead to increased costs for consumers, reduced availability of goods, and a strained relationship between the two nations. Businesses in both countries may face uncertainty, impacting investment decisions and economic growth.
How to Ship Your Car Effectively
Shipping a car doesn’t have to be complicated. Here are some steps to ensure a smooth shipping process:
1. Research Shipping Companies
Choose a reputable shipping company that specializes in vehicle transport, such as US Canada Auto Transport. Look for reviews, ask for quotes, and ensure they are licensed and insured.
2. Prepare Your Vehicle
Before shipping, make sure your vehicle is in good condition. Remove personal items, clean the car, and document any existing damage. This will help avoid disputes later on.
3. Book Early
Once you’ve chosen a shipping company, book your shipment as soon as possible. The sooner you secure your shipment, the more likely you are to lock in lower rates.
Making the Right Move
So, there you have it. It remains to be seen whether President Trump will go ahead with his threat to impose 25% tariffs on Canada. If you have been planning to ship a car across the US Canada border, it’s better to do so now.
President Trump’s tariffs, should they be effect, will upend the auto industry in both countries. Most likely manufactures will choose to pass the burden to consumers, leading to higher prices.
Shipping your car now can save you money and provide peace of mind as the automotive landscape shifts. With uncertainty surrounding trade policies and the possibility of escalating tensions, acting quickly could make all the difference in your financial future.