Canadian consumers should brace for higher prices on both new and used vehicles as a result of escalating U.S. tariffs on automobile imports, industry experts warned Friday.
U.S. President Donald Trump recently imposed 25 per cent tariffs on imported vehicles, with limited exemptions for certain auto parts that comply with the Canada-U.S.-Mexico Agreement (CUSMA). In response, Canada has introduced its own retaliatory tariffs on U.S.-built automobiles, igniting further uncertainty across the North American auto sector.
The result, according to leading auto analysts, is a ripple effect that will hit buyers at every level of the market.
“Prices are already ticking up, especially for in-demand used vehicles, as sellers anticipate consumers shifting away from new car purchases,” said Sean Mactavish, CEO of used-car marketplace Autozen. “As affordability becomes a growing concern, more people are likely to turn to the used car market—or hold off on buying altogether.”
The first major impact of the tariff war has already been felt in Windsor, Ontario, where Stellantis temporarily paused operations at its assembly plant, citing tariff-related disruptions to supply chains and production schedules.
“An increase in new car prices is not just likely—it’s inevitable,” said Baris Akyurek, Vice-President of Insights and Intelligence at Autotrader.ca. “Automakers will pass some of the added costs on to consumers, while dealers and manufacturers will also need to rethink inventory, pricing strategies, and even consumer financing options.”
Industry experts agree that the full effect of the tariffs will take time to play out, but early indicators suggest a marked change in consumer behavior, including:
- Increased demand for affordable used vehicles
- Delays in purchasing or financing new cars
- Potential shortages of popular models due to plant slowdowns and disrupted supply chains
With consumers facing rising inflation and interest rates, the additional cost burden on vehicle ownership is expected to create significant market challenges in the months ahead.
Both industry leaders and consumer advocacy groups are urging federal and provincial governments to monitor the situation closely and support policies that protect Canadian auto workers, manufacturers, and consumers from long-term damage.
For more information and ongoing coverage of Canada’s auto sector, visit www.autotrader.ca or www.autozen.ca.