Canada will impose dollar-for-dollar tariffs on U.S. automotive and industrial goods starting September 8, escalating a trade dispute that collapsed on August 22. The measures target steel, dairy, appliances, agricultural equipment and electronics, adding to costs for American automakers reliant on cross-border supply chains.
General Motors estimates gross tariff expenses between $2.5 billion and $3.5 billion for the year, with roughly $900 million remaining after current hedging. The company, trading at $85.48 with a market capitalization of $75.1 billion, expects operating profits to decline by more than 20% due to the duties. Ford projects a net tariff impact of about $1 billion in 2026, while Stellantis faces the steepest decline, down 53.8% year-to-date to $5.22 per share with a $15.1 billion market cap.
Ford’s net margin stands at negative 4.4% with a debt-to-equity ratio of 461%, underscoring its vulnerability to additional trade costs. Stellantis, already trading near its 52-week low of $5.05, was downgraded by Bernstein to Underperform and Piper Sandler to Underweight amid high dealer inventories and a stalled U.S. recovery. The S&P 500 Automobiles index has fallen nearly 19% this year.
The dispute centers on U.S. tariffs of 50% on automotive imports from Canada and Mexico, with most automakers facing an effective 25% duty. Competitors from Japan, South Korea and Europe face a flat 15% tariff, giving them a 10-percentage-point cost advantage. Proposed North American trade rules requiring 50% U.S.-made content to qualify for lower tariffs could add at least $2 billion in annual costs for each major automaker.
Ford is adjusting production by relocating Lincoln models from China to U.S. factories to mitigate exposure. GM has reached tentative labor agreements with Unifor covering 4,600 Canadian workers. No new trade talks are scheduled, and U.S. Trade Representative Jamieson Greer said the U.S. is proceeding with its measures despite Canadian retaliation.
