Canadian Prime Minister Mark Carney and President Donald Trump are clearly at odds over the benefits of U.S. automakers building vehicles in Canada—fueling fresh concerns about the future of the U.S.-Mexico-Canada Agreement (USMCA).
The details: Speaking at a Bank of Montreal conference in Toronto on Wednesday, Carney pushed back on the president’s remarks about the American auto industry and its ties to Canada, made during the prime minister’s White House visit a day earlier, reports Bloomberg.
Speaking to reporters in the Oval Office, Trump cited the auto industry as an example of “natural conflict” between the two countries as he sat alongside Carney.
“He wants to make cars, we want to make cars, and we’re in competition,” said Trump, as Carney listened. “And the advantage we have is, we have this massive market.”
What they’re saying: “For America to be fully competitive, to be globally competitive in autos, you need USMCA,” said Carney at the Toronto conference, adding that “not everyone shares that view at this time, and so that’s a real discussion.
Why it matters: A policy rift between the U.S. and Canada on auto manufacturing could disrupt supply chains, affect investment decisions, and inject new uncertainty into one of the world’s most integrated manufacturing networks.
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Between the lines: Trump’s position that the U.S. doesn’t want to see its cars made in Canada was echoed by U.S. Commerce Secretary Howard Lutnick, who also spoke at the Bank of Montreal conference—deepening concerns about the stability of cross-border auto ties.
Roughly 50% of the parts in vehicles assembled in Canada originate from the U.S., according to Canadian officials.
In 2024, the U.S. reportedly exported $29.5 billion in auto parts to Canada while importing $19.5 billion from its northern neighbor.
Canada remains the largest foreign buyer of American passenger vehicles and light trucks, accounting for $23.2 billion in purchases last year.
General Motors $GM ( ▼ 0.67% ) and Stellantis $STLA ( ▼ 9.55% ) stand to bear the brunt of deteriorating trade relations between the U.S. and Canada, with both automakers already scaling back production in the country.
“Our relationship will never again be what it was,” Carney said of Canada’s ties to the U.S. during the Toronto business conference, reports Bloomberg.
Bottom line: A breakdown in U.S.-Canada auto trade relations could squeeze inventory pipelines, raise vehicle costs, and create longer lead times for parts and finished models, with GM and Stellantis retailers poised to face the sharpest disruptions if USMCA tensions escalate.
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