Canada’s automotive production plummeted to its lowest level in more than 30 years as escalating trade tensions with the United States devastate the country’s manufacturing sector, new data shows.
Canada’s share of North American vehicle production fell to just 7.6% in the second quarter of 2025, marking the weakest performance in over three decades, according to analysis by BMO Capital Markets released Monday. Auto assemblies dropped 5.8% in June alone compared to the previous month.
The sharp decline follows President Donald Trump’s imposition of 25% tariffs on Canadian-made vehicles and auto parts in March, part of a broader trade dispute that began with border security concerns. Trump announced Thursday that tariffs on Canadian imports will jump to 35% starting Aug. 1, escalating the trade dispute further.
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“Canada’s share of North American vehicle production falls to 3-decade low,” WSJ Ottawa correspondent Paul Vieira wrote, citing the BMO data that shows total North American vehicle assembly fell 3.3% in the first half of 2025, with Canada recording a steeper 6.4% drop.
Major automakers have responded with temporary plant shutdowns and production cuts across Canada. Industry analysts warn that Ontario could lose more than 56,000 vehicles worth of production this year, with manufacturing jobs increasingly at risk.
Canada has retaliated with its own 25% tariffs on US-made vehicles, effective since April. Prime Minister Mark Carney called Trump’s levies “unjustified” and harmful to Canadian workers.
The automotive industry has been deeply integrated across North American borders for decades under trade agreements. Most of the 1.3 million vehicles made in Ontario in 2024 were exported to the US. As recently as 2000, Canadian auto production reached 2.9 million units, according to DesRosiers Automotive Consultants.
Trump has cited national security concerns and alleged Canadian inaction on fentanyl trafficking as justification for the tariffs, though federal statistics show Canada accounts for just 0.2% of fentanyl seizures at US borders.
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