Rosenberg Research Sees "Big" Negative Hit to Canada's Economy From Latest U.S. Auto Tariffs

08:09 AM EDT, 03/27/2025 (MT Newswires) -- United States President Donald Trump finally did it late Wednesday and lowered the boom on the global automotive sector, with the most negative implications for Mexico and Canada -- the only leniency saved for U.S. parts manufacturers who serve the domestic market, said Rosenberg Research.

The North American motor vehicle supply chain has just been "torpedoed" in one executive order, noted Rosenberg Research.

The 25% tariff on all finished vehicles and parts based on the value of non-U.S. content begins next Thursday and is sure to wreak havoc on production and employment across the continent, with prices likely to undergo a sizeable upward shift, stated Rosenberg.

This will add an average of US$6,000 to the price of cars built in Canada and Mexico, which represents a 15% spike, according to Rosenberg. One can easily see a 30% downward shift in U.S. auto sales in the coming months and quarters and a hit to output and employment.

This all comes ahead of the reciprocal duties expected next week, it added. Rosenberg will see what the response is going to be, especially in Canada, considering that between this and the 25% tariffs placed on steel, aluminum, and lumber, it is estimated to cost Canada nearly a half-point of real gross domestic product growth annually for the next two years and a cumulative job loss of 180k.

There surely are more negative trade actions to come and Canada's cabinet meets Thursday to decide on a response, pointed out Rosenberg.

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