Experts are predicting that the recent U.S. tariffs on Canadian auto imports will significantly drive up prices for both new and used vehicles. The automotive market is already feeling the effects, with reports indicating that prices are increasing on some used cars as sellers prepare for a surge of buyers seeking more affordable options compared to new vehicles.
On April 4, 2025, it was reported that U.S. President Donald Trump has enacted a 25 percent duty on imported vehicles, while providing a temporary exemption for certain parts that comply with the Canada-U.S.-Mexico Free Trade Agreement (CUSMA). In response to these tariffs, Canada has also implemented retaliatory tariffs on automobiles imported from the United States, further complicating the cross-border trade dynamic.
Industry leaders in the automotive sector have voiced serious concerns regarding the potential consequences of these tariffs, warning that they may lead to plant shutdowns across the industry. Stellantis, a major automotive manufacturer, has already confirmed it was the first company to temporarily halt operations at its plant located in Windsor, Ontario.
Baris Akyurek, the vice president of insights and intelligence at Autotrader.ca, stated that an increase in new car prices is an unavoidable outcome of the tariffs. The uncertainty surrounding pricing and availability is likely to push consumers toward more economical choices, such as opting for used cars or even postponing significant vehicle purchases.
Sean Mactavish, CEO of the used-car marketplace Autozen, noted that the anticipation of rising prices is already influencing the market, with an uptick in prices for certain used vehicles. Consumers are growing cautious, leading them to evaluate their options more thoroughly in light of the current market conditions.
Experts emphasize that the ripple effects of the tariffs will be felt across the automotive landscape, impacting not just pricing but also consumer behavior and dealer inventory strategies. With these tariffs in effect, the broader implications for both Canadian and U.S. auto industries remain a critical focus for stakeholders in the market.
