Toyota and Honda at Risk Due to 50% U.S. Tariffs on Canadian Cars

By: delo.ua|2026/08/31 14:48:22

Toyota and Honda may suffer from new 50% tariffs on imports of Canadian cars proposed by U.S. President Donald Trump starting January 1. The main goal of the initiative is to pressure Canada, but Japanese automakers will be the most vulnerable. Japanese brands are already facing stiff competition from Chinese electric vehicles in Europe and Asia, and the U.S. market has remained their primary refuge. Last year, Canadian-assembled vehicles accounted for 25% of Honda's sales and 17% of Toyota's sales in the U.S. Doubling the current tariffs will lead to significant losses. U.S. tariffs have already cost Toyota $8.8 billion in the last financial year, prompting the company to double its capacity in the U.S. by investing $10 billion in a new plant in Texas. Honda has suspended plans to build a new plant in North America due to uncertainty surrounding the USMCA trade agreement. If the tariffs come into effect, Toyota and Honda will likely attempt to redirect Canadian-made cars to other markets, which will be a challenging task given the adaptation of vehicles to U.S. market requirements. It is worth noting that on August 22, U.S. tariffs of 50% on Canadian goods worth $20 billion came into effect, and starting January 1, 2027, tariffs on cars, trucks, and auto parts produced in Canada will also be 50%.

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