Americans love SUVs and full-size pickups. President Donald Trump’s latest car tariffs would reach the American bestsellers with remarkable precision.
In a Truth Social post on Monday, the president threatened 50% tariffs on all Canadian-made cars and trucks. The tariffs, which could come into effect on January 1, 2027, will also hit imported steel and auto parts.
America’s second, third and fourth best-selling cars in 2025 – the Chevy Silverado, the Toyota RAV4 and the Honda CR-V – all rely on manufacturing plants in Canada. Last year’s best-selling car, Ford’s F-Series, will also begin Canadian assembly of its Super Duty trucks later this year. The fifth best-selling vehicle in the U.S. last year, the Ram 1500, also has a significant share of parts assembly in Canada.
“The impact of unworkable tariffs would be felt far beyond Canadian assembly plants,” Erin Keating, executive analyst at Cox Automotive, told Business Insider. “Some of America’s most popular vehicles are built in Canada.”
Automakers have escape routes, but they are not easy
Rows of newly assembled Honda vehicles are parked outside the factory in Alliston, Ontario. Cole BURSTON/AFP via Getty Images
Tax exposure would not be distributed evenly across each vehicle.
Toyota, Honda, Ford and General Motors also rely on it assembly plants in the US to build these big cars. That could allow automakers to shift some production, David Whiston, an auto analyst at Morningstar, told Business Insider.
For example, Honda has already moved some of its Canadian CR-V production intended for American buyers to Ohio in 2025, although its Ontario plant will continue to export vehicles to the US.
Still, the timing is tricky for some of these big nameplates. Due to production restrictions, RAV4 sales are down 36% this year Toyota’s redesign of the popular SUV. The automaker is already trying to ramp up production at its current factories to meet demand. GM is preparing its Oshawa plant to build the next generation of full-size Silverados. Ford, meanwhile, has spent about CA$5 billion converting Oakville to produce Super Duty trucks.
“The math on that just got a lot worse for them with the 50% rate,” Whiston said of the Canadian investments.
The White House solution: Build in America
Auto companies have invested billions in American factories. So far, these investments have not been focused on bringing manufacturing back to Canada. JEFF KOWALSKY/AFP via Getty Images
The White House defended the tariffs as an incentive for automakers to expand U.S. production.
“President Trump has always been clear: If you don’t want to worry about tariffs, make your product in the US,” White House spokesman Kush Desai said. “Both domestic and foreign automakers, from Ford to Stellantis to Toyota, are investing billions to bring production back to America without raising prices for this reason, and other automakers should follow suit.”
These investments do not necessarily replace Canadian capacity.
The Toyota investment of $3.6 billion Recently highlighted by the White House, Tacoma production will move from Mexico to Texas by 2030. This does not affect the higher volume RAV4.
It also remains unclear how the new rate will be calculated. The current 25% rate on Canadian vehicles offers a discount on US content. The White House did not immediately answer whether the tariffs themselves could affect vehicle prices and availability.
Still time for a deal
Trump’s tariff threat comes as the US, Mexico and Canada are set to renegotiate the USMCA. Alex Livesey – Danehouse/Getty Images
Automakers have four months to adjust their purchasing and production plans, and the tariff could still change through negotiations between Washington and Ottawa, analysts said.
“I think there’s a lot to be done between now and January 1, so maybe the two countries will come to something,” Whiston said.
Keating said the parts rates could also reach drivers who aren’t looking for a new vehicle. More expensive replacement parts could increase repair and insurance costs, she said, regardless of where the driver’s vehicle was assembled.
“The bigger question is affordability‘Any policy that increases costs puts extra pressure on a market where many households already feel that almost everything costs more than a few years ago.’
Toyota declined to comment. Honda had no comment at the time of publication. Ford and GM did not respond to requests for comment.
