For the first time since the 1990s, Canada is importing more vehicles made in Mexico than cars built in the U.S. According to Bloomberg, which cites data from Statistics Canada, Canada imported $1.08 billion CAD worth of Mexican-built vehicles in June 2025, compared to $950 million worth of U.S.-made vehicles.
This shift is directly linked to the tariffs imposed by the U.S. administration on foreign vehicles, in contradiction with the United States–Mexico–Canada Agreement (USMCA). In response, Ottawa and Mexico City have retaliated with their own surtaxes.
Automakers adjust their production
These protectionist measures have disrupted supply chains. Subaru has redirected its Canada-bound production to Japan instead of Indiana. Mazda, for its part, has completely stopped exporting the popular CX-50 to Canada. Other automakers have started using bonded carriers to transit Mexican vehicles through the U.S. to Canada.
U.S. auto plants stand to lose big
Before the tariffs were imposed, Canada represented a crucial market for American assembly plants, with about $2.5 billion USD in car imports per month. In 2024, Canadians bought $23.2 billion USD worth of American vehicles, more than the next six largest U.S. export markets combined.
If the trend continues, this figure could be cut in half in 2025, hitting American automakers and their suppliers hard and putting thousands of jobs at risk.
More affordable vehicles for Canadians
This shift towards Mexico is also helped along by the availability of cheaper vehicle models made in Mexico, like the Nissan Versa, which are available in Canada but not in the U.S. That only accentuates the loss of U.S. market share to Mexico.
Prices set to rise
The uncertainty surrounding trade negotiations and tariffs is likely to lead to higher prices for car buyers. Automakers will have to choose between absorbing some of the costs by producing more in the U.S. — at a higher price — or passing the bill on to consumers.
Towards an opening to Europe?
In Canada, several voices are calling for regulatory reform to allow the sale of vehicles that comply with European standards, which would further increase the pressure on the American industry. If this materializes, the $23 billion USD in imports of American cars could collapse even more quickly.