August 24, 2026 - Vehicle Prices Likely to Climb Even Higher

This is the Telemetry Transportation Daily for August 24, 2026, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry. 

Over this past weekend, trade talks between Canada and the U.S. aimed at avoiding new 25% tariffs on a wide variety of goods imported from Canada broke down in the final hours. The failure to reach an agreement was not that surprising, as Canada, like many other countries, has found the Trump administration to be an unreliable negotiating partner.  Canadian Prime Minister Mark Carney went so far as to say about the U.S., "We recognized that sometimes its signature was written in pencil."

While it appeared that the two sides might be close to an agreement on Friday, the U.S. changed the terms in the final hours. There had apparently been an agreement to reduce tariffs on Canadian-produced vehicles from 25% to 15%, but the U.S. decided that it did not want to include medium- and heavy-duty trucks in that group of vehicles. After canceling its plans to build new electric SUVs at its Oakville, Ontario, assembly plant, Ford announced it would instead retool the factory to expand production of its Super Duty trucks by 150,000 units. That plant was due to start production in the coming weeks. However, those trucks will no longer see tariff reductions. 

In fact, in a social media outburst on Monday, Trump declared he would raise the tariffs on all Canadian-built vehicles, auto parts, and steel to 50% on January 1, 2027. Trump seems intent on completely destroying the Canadian auto industry and raising prices for American consumers at the same time. In addition to Ford, Stellantis, General Motors, Honda, and Toyota will all take a big financial hit if Trump follows through on this latest threat, as will parts makers like Magna and Linamar, among many others. For Toyota and Honda, a significant proportion of their two most popular models, the RAV4 and CR-V, are produced at plants in Canada. While consumers in both countries will feel the pain of these moves, it will likely lead to Chinese automakers signing deals to produce vehicles in Canada sooner rather than later. 

Thanks for listening.