The Automakers Most at Risk in the U.S.-Canada Trade War Aren't Who You Think

The Conventional Narrative Gets It Wrong

When President Donald Trump enacted 50% tariffs on roughly $20 billion in Canadian imports starting Aug. 22, the immediate assumption was that Detroit’s Big Three would bear the brunt of the pain. After all, Ford, General Motors, and Stellantis have historically defined the American auto landscape — their assembly plants, supplier networks, and workforce concentrated across Michigan, Ohio, Indiana, and Wisconsin, states with deep cross-border ties to Ontario.

But new data tells a different story. A deeper look at where these companies actually manufacture their vehicles for the American market reveals that Honda and Toyota face proportionally far greater exposure to the escalating trade conflict than any of the Detroit automakers.

The question isn’t just about who makes the most noise. It’s about who has the most to lose.

The Numbers That Flip the Script

Ivan Drury, director of insights at Edmunds, crunched the data on vehicles built in Canada and imported for U.S. sales from January through Aug. 23. The results were striking:

• Ford: 0% of new vehicle sales come from Canadian-made cars
• GM: 4.5% from Canadian manufacturing
• Stellantis: 5.1%
• Toyota: 13.7%
• Honda: 20.9%

Twenty percent. For context, that means one in five Honda vehicles sold in the United States rolls off a Canadian assembly line. The Civic and CR-V — two of Honda’s highest-volume models in America — are both produced in Canada. Toyota’s Lexus NX, Lexus RX, and RAV4 share the same supply chain reality.

Meanwhile, Ford’s entire U.S. lineup arrives from domestic plants. Stellantis, despite having some Canadian production including the Chrysler Pacifica and Dodge Charger, keeps over 94% of its American sales out of Canada’s factories. GM sits somewhere in between, but still under 5%.

This isn’t a hypothetical risk. On Aug. 23, Honda Executive Vice President Noriya Kaihara told reporters at a news roundtable that “we may have to” raise prices if Washington and Ottawa can’t reach a new trade deal. The automaker signaled it would initially try absorbing costs through supplier negotiations, but the warning was unmistakable: no deal could mean higher prices for consumers and a potential shelve of plans for Honda’s eighth North American assembly plant.

Why the Detroit Three Stay Silent

Ford, GM, and Stellantis declined to comment when asked about the trade war’s potential impact on their businesses. The silence isn’t accidental. These companies benefit from a USMCA rules-of-origin exemption that shields them from Section 232 tariffs on imported autos and parts — a carve-out negotiated specifically to protect integrated North American manufacturing.

Matt Blunt, president of the American Automotive Policy Council, issued a statement on Aug. 25 urging negotiators to reach a deal that “enhances North American auto competitiveness.” But the council represents Detroit’s interests, and those interests are comparatively insulated.

The tariffs Trump has already imposed include 25% on all imported autos and auto parts, with a threat to double that to 50%. The Section 338 duties on steel and aluminum hit harder at material costs for everyone. But the USMCA exemption means the Detroit Three’s cross-border supply chains — particularly the parts flowing from Ontario plants into Michigan and Ohio assembly lines — face less direct exposure than they did before the current round of threats.

What Happens When the Prices Rise

The immediate impact of tariffs, according to Sam Fiorani at AutoForecast Solutions, will be cost absorption. Automakers eat the margin pressure as long as they can. But Fiorani warned that phase won’t last.

“Price increases, de-contenting, and reduced availability of models, trims, or options will follow,” he said. That means consumers see higher sticker prices, fewer features, and potentially some variants disappearing from the market entirely.

Drury noted that even if Honda and Toyota raise prices, Detroit likely won’t match the increase dollar-for-dollar. Instead, the Big Three will probably reduce incentives on competitive models to preserve margins without appearing to exploit the situation. That’s a subtle but important distinction — it means the tariff pain gets distributed unevenly across brands and consumers.

The Supply Chain Problem No One’s Discussing

The conventional coverage focuses on finished vehicles. But the deeper vulnerability lies in the supply chain itself. Patrick Anderson of the Anderson Economic Group called the initial U.S. tariffs on Canadian goods “more of an annoyance than a real threat” — feathers, honey, cotton sweaters, hockey sticks. But he flagged the retaliatory tariffs and the threatened auto-specific duties as “an absolute body blow.”

That’s because Canadian manufacturing doesn’t just feed American assembly lines with complete vehicles. It supplies critical parts — transmissions, engines, stamped components — that flow back across the border repeatedly during production. A single F-150 or Silverado might cross the U.S.-Canada border seven or eight times during its build cycle. Each crossing now carries a tariff cost that didn’t exist before.

The Section 232 tariffs Trump threatened to double would hit these parts directly. Even the USMCA exemption, which shields compliant vehicles and parts, doesn’t fully protect against the broader supply chain disruption. As Anderson put it: “It would mean plants closing, and many job losses in Michigan, Ontario, Ohio, Indiana, and Wisconsin.”

The States Most at Risk

Michigan is, by Anderson’s assessment, “the most vulnerable state to a U.S.-Canadian trade war.” The logic is straightforward: Michigan’s agricultural exports, auto parts exports, and even the parts used in its own assembly plants all face cross-border tariff exposure. Canada is Michigan’s top trading partner, and the state’s economy is deeply integrated with Ontario’s.

Right across the river, Ontario faces the same symmetry. The province’s manufacturing sector — particularly in the automotive corridor stretching from Windsor to Toronto — depends on just-in-time parts flows and shared production cycles with Michigan. A trade dispute doesn’t discriminate between finished vehicles and half-built engines sitting in transit.

What’s Left on the Table

The broader USMCA framework adds another layer of uncertainty. The agreement’s mandatory review process kicked in July, and while the current deal remains fully in effect through 2036, the annual review mechanism means the terms are never settled. Automakers have been pushing for a revised USMCA that better rewards domestic manufacturing and penalizes foreign reliance — a goal that aligns with Trump’s broader trade strategy but creates complications for companies like Honda and Toyota that built significant Canadian operations precisely to serve the North American market.

Canada’s retaliatory tariffs starting Sept. 8 compound the damage. They’re designed dollar-for-dollar to match the U.S. actions, which means they target the same sectors — steel, aluminum, and potentially autos — creating a feedback loop that amplifies costs for everyone.

The Real Story

The headline narrative frames this as a fight between Detroit and Ottawa. But the data suggests a more complex reality: the automakers most exposed to a prolonged trade war aren’t the ones with the loudest lobbying presence. They’re the ones with the most cross-border manufacturing dependency.

For Honda and Toyota, the trade dispute isn’t theoretical. One in five Honda vehicles sold in the U.S. comes from Canada. That’s not a supply chain that can shrug off 25% or 50% tariffs. For the Detroit Three, the risk is real but more contained — at least for now, thanks to USMCA exemptions and lower Canadian manufacturing shares.

As Anderson warned, the trade war “may have started with playground taunts and annoying tariffs on feathers and hockey sticks. But it will lead to shuttered plants if we don’t find a way to climb down.”

The question is whether the climb-down happens before the plants start closing.

Source: Detroit Free Press, Aug. 28, 2026