President Trump threatens escalated tariffs on vehicles imported from Canada to 50%, adding more chaos to an industry challenged by trade wars. The reignited trade war between the U.S. and its northern neighbor hit a fever pitch this week after President Trump proclaimed, “We don’t need Canada, they need us.” The American auto industry, however, sees things differently. Detroit’s carmakers in particular could see some of their most profitable products walloped if Trump follows through on a threat to double tariffs on cars and auto parts from Canada to 50% from 25%.

Stellantis assembles the Chrysler brand’s popular Pacifica minivan just across the border in Windsor, Ontario. General Motors produces pickup trucks at a factory in Oshawa, Ontario. Ford is set to begin making F-Series Super Duty trucks later this year at a plant near Toronto in Oakville, in addition to at a factory in Kentucky. And Ford and GM each produce engines in Canada for trucks and SUVs sold in the U.S. Canada—the U.S.’s second-largest trading partner—accounted for 8% of North American vehicle production in 2025, according to industry data provider Omdia.

While that is down from about 13% a decade ago as jobs and production have moved to Mexico and the U.S., the country remains a key maker of cars and parts—not to mention a buyer of them. Canada is the biggest export market for larger American trucks. UBS analysts said Honda and Toyota would be most exposed to increased tariffs, with Canadian imports accounting for roughly one out of every 10 vehicles the companies sell in the U.S. Automakers, for now, view the Jan. 1 deadline set by Trump as a sign that the higher levies are less a threat and more of a negotiating tactic with Canada.

Still, there is reason for concern. Stephen Beatty, a former vice president at Toyota’s Canada division, said one of Canada’s most effective responses would be to ratchet up tariffs on full-size U.S. pickups, such as Ford’s F-150, if Trump follows through with his threat. Thomas Kowal, chief executive of Michigan auto parts maker Leggera Technologies, said his company could benefit from the proposed tariffs, since its magnesium parts compete with aluminum from Canada. The prospect of tariffs doubling on vehicle imports from Canada also is happening amid talks of overhauling the North American trade deal, known as the U.S.-Mexico-Canada Agreement.