It won’t come as a shock to many of you, but it’s sure looking like President Donald Trump’s tariff mess is going to result in car sales in the U.S. and Canada dropping by 1.8 million vehicles in 2025, and that’s just the beginning of the issue. If the global trade war escalates, sales in the two North American countries could stagnate over the next decade. That would be an unmitigated disaster for automakers.
If current tariffs were to remain in place for the next 10 years, it’s expected that sales of light-duty vehicles in the U.S. and Canada would hit about 17.6 million vehicles. That is a whopping 7 million units fewer than what is expected with no trade conflicts and strong economic growth, according to a forecast from Detroit-based automotive Telemetry, who spoke with Reuters exclusively.
President Trump’s 25% automotive import tariffs went into effect earlier this month, and it included vehicles built in Mexico and Canada. He has also imposed reciprocal tariffs of varying levels on other countries all over the world. Basically, he’s made a huge goddamn mess.
Everything is a mess
Here’s what the Big Three automakers are doing to get around the impossible situation Trump has created, according to Reuters:
The tariffs have pressured automakers to make production changes with General Motors increasing truck output at an Indiana plant and Stellantis , maker of Ram trucks and Jeeps, temporarily shutting down production at two plants in Mexico and in Canada, affecting five U.S. facilities that are connected to them.
Automakers including Ford Motor and Stellantis upped their incentive offers to ease consumers’ concerns about the duties adding to vehicle prices. Analysts have projected that sustained tariffs will increase prices by thousands of dollars, and automakers have warned the same.
Vice president of insights at Telemetry, Sam Abuelsamid, says the firm expects layoffs because of this sales dip, adding that “even to the degree that some production shifts to the U.S., it’s not going to be enough to offset the lost employment from higher costs and lower sales.” I’ll tell you this much, it’s not a good situation folks.
The thing to keep in mind with all of this, above all else, is the uncertainty of what is going to happen. Trump has shown that he isn’t afraid to backtrack and say “never mind” to plans, policies and tariffs that were meant to be permanent. Maybe we’ll all wake up tomorrow and the tariffs will be gone, or maybe we’ll wake up and there will be a 3,000% tariff on vehicles built in Canada. Who the hell knows? We sure don’t.
