The Canadian market share of U.S.-made vehicles fell by 20 per cent in the first half of 2026 from a year earlier, as the trade war pushed automakers to shift supply lines or halt exports to Canada.
Cars and trucks made in the United States face retaliatory tariffs of 25 per cent on U.S. content, a measure Ottawa took in response to U.S. tariffs worth the same amount.
In response to the Canadian tariffs, Volvo, Tesla, Subaru and Mazda have stopped exports of certain U.S.-made models to Canada, or shifted production to other countries in order to avoid the Canadian tariffs. Cars made in Mexico, Japan and South Korea enter Canada free of tariffs.
The JD Power figures show Mexican-made cars’ market share rose by 22 per cent to hold 22.2 per cent of sales in the first half of 2026, compared with the year-ago period. Japanese cars’ share increased 21 per cent to command 16.6 per cent of the market, while South Korea’s share increased by more than 7 per cent to 15.6 per cent.
Canadian-made vehicles saw their market share fall by 9 per cent to 11.5 per cent.
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U.S.-made vehicles retained the largest share of the Canadian market in the first half of the year, with 28.4 per cent. This is down from 35.4 per cent in the first half of 2025, JD Power said.
“Our data shows the largest change for vehicles coming out of the U.S.,” said Robert Karwel, director of OEM Solutions with JD Power in Canada.
Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association (CVMA), which represents the Detroit Three automakers in Canada, said the share of U.S. vehicles in Canada was 43 per cent as recently as 2024. He said U.S. government data that show declines in U.S. auto production and employment underline the impact of U.S. protectionism.
“U.S. trade policy is damaging the U.S. automotive industry, and virtually every metric supports that,” Mr. Kingston said.
Tariffs are “not a policy that is strengthening the U.S. automotive industry,” Mr. Kingston said. “It’s obviously hurting Canada, it’s obviously hurting Mexico, but overall it is weakening North America’s industry at a time where we have Chinese exports growing all over the world.”
Canada remains the largest market for U.S.-made vehicles – larger than Germany, China, Mexico and South Korea combined, according to the CVMA. Many of the U.S.-made vehicles are bigger SUVs and pickups for which there is little demand in places outside Canada and the U.S., said Lucas Malinowski, head of Global Automakers of Canada, which represents overseas brands.
“It is a perverse outcome of this whole trade war, right?” he said. “It’s hurting Canadian auto manufacturing, but it’s also hurting U.S. auto manufacturing.”
Andrew King, managing partner of DesRosiers Automotive Consultants, confirmed imports from the U.S. have slipped this year.
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“It is likely more based on sourcing changes to avoid tariffs than consumer demand,” Mr. King said. “A number of vehicle companies have changed their sourcing of U.S. vehicles to avoid the Canadian countertariffs – Tesla being the leading example – it is now bringing in vehicles to Canada from Germany and China rather than from the U.S. This was done primarily to avoid the 25-per-cent countertariff. A number of other manufacturers have done the same thing – which has changed sourcing patterns notably.”
DesRosiers’ data show Canadians bought 950,000 cars in the first half, down by 2.6 per cent from the same period of 2025.
Mazda Canada spokeswoman Sandra Lemaitre said the Huntsville, Ala.-made Mazda CX-50 is no longer available in Canada because of the tariffs.
Volvo makes the EX90 in Charleston, S.C., but stopped shipping the electric SUV to Canada because of the tariffs, said company spokeswoman Jennifer Okoeguale. The company is considering bringing in the smaller, Chinese-made EX30 under Canada’s agreement to allow 49,000 electricvehicles from China, Ms. Okoeguale said.
After a one-year halt, Nissan recently resumed shipping to Canada the models made in Tennessee and Mississippi: Pathfinder, Murano and Frontier, and Infiniti QX60 and QX65.
Nissan cars made in Mexico and Japan account for more than 80 per cent of its Canadian sales, a share that is unchanged since before tariffs, said Didier Marsaud, a company spokesman.
U.S. tariffs on vehicles made in Europe have eliminated a Stellantis car from Canadian dealerships. The automaker ceased production of the Dodge Hornet, made in Italy and exported to North America, after the U.S. imposed 25-per-cent tariffs, said Lou Ann Gosselin, a spokeswoman for Stellantis.
Ottawa’s tariffs on U.S.-made cars, announced last year, include a confidential carve-out for companies that have an investment or production footprint in Canada. This allows the five companies that make cars in Ontario – Ford, General Motors, Stellantis, Honda and Toyota – to import U.S. cars tariff-free. However, the federal government has said recent job or production cuts by Stellantis and GM have led to a reduction in tariff remissions for those companies.
The U.S. tariffs, imposed by President Donald Trump, are a violation of the North American free-trade deal he signed in his first term.
According to U.S. Customs and Border Patrol, the U.S. has collected US$50-billion in tariffs on autos and parts since 2025. This includes US$7-billion on Canadian-made vehicles, Mr. Kingston said.
