The U.S.-Canada trade war has intensified after talks between the two countries collapsed without a deal to avert new tariffs.
President Trump’s latest escalation introduced 50% tariffs on select Canadian goods, which have already taken effect and are rattling markets.
The auto sector faces some of the sharpest exposure, given how deeply integrated U.S. and Canadian production networks have become over decades.
Ford (F), General Motors (GM), and Stellantis (STLA) have all scaled back vehicle assembly in Canada in recent years, leaving them vulnerable to rising input costs.
Japanese automakers Toyota (TM) and Honda (HMC) have moved in the opposite direction, significantly growing their Canadian production footprints over the same period.
Toyota and Honda together represented 76.5% of Canada’s total vehicle production in 2025, each producing more vehicles there than Ford, GM, and Stellantis combined.
Unifor, the union representing Canadian auto workers, sharply criticized the tariffs, calling them an “intimidation tactic” that harms workers on both sides of the border.
The union argued that the highly integrated nature of the auto industry means ongoing trade instability creates damage that does not stop at any border.
U.S. homebuilders are also feeling the strain, as Canadian raw materials and finished goods like appliances, cabinets, and electronics face new cost pressures.
S&P Global warned that building materials companies, already navigating margin pressures from rising commodity, labor, and freight costs, may face further financial deterioration.
Canadian Prime Minister Mark Carney announced retaliatory tariffs targeting the United States after walking away from what he described as a “bad deal.”
Canada’s response will target U.S. steel and dairy industries, while also covering agricultural equipment, pulp and paper, and electronics sectors.
The Canadian retaliatory measures are set to take effect on September 8, setting up a prolonged standoff with no clear resolution in sight.
