TRUMP’S CANADA THREATS BACKFIRE — U.S. AUTO GIANTS CRUSHED AS CANADIANS DITCH AMERICAN CARS

Donald Trump’s trade threats against Canada were meant to project strength, but they instead triggered one of the most dramatic collapses of U.S. automotive influence in modern history. As tariffs and hostile rhetoric escalated, Canadian consumers quietly walked away from American brands, choosing Japanese vehicles instead. The result is stark: Detroit’s once-dominant position in Canada has shrunk to just 23% of total vehicle production, down from 56% less than a decade ago.

Ford, General Motors, and Stellantis—companies that built over 100 million vehicles in Canada across a century—have steadily retreated. Assembly plants closed, jobs were cut, and production lines were scaled back across Ontario. Meanwhile, Honda and Toyota held their ground. Without massive expansions, Japanese automakers increased their share simply by staying invested while Detroit pulled out, turning stability into market dominance.

The contrast in strategy explains the outcome. American automakers treated Canadian plants as short-term profit centers, cutting production whenever margins tightened. Japanese firms treated their facilities as long-term assets within global production networks. Toyota’s RAV4 Hybrid and Lexus RX, and Honda’s Civic and CR-V—built in Canada—remained consistently available, reliable, and competitive. Canadian buyers noticed, and loyalty shifted.

Trump’s 25% tariffs on vehicles from Canada and Mexico accelerated the damage. Integrated North American supply chains were disrupted, hitting Detroit hardest as parts and components cross borders multiple times during production. Japanese automakers, with more localized manufacturing and fewer cross-border dependencies, absorbed the shock far better. Ironically, U.S. automakers ended up paying billions in tariff costs while their Japanese rivals gained market share.

Now, a new threat looms that could make Detroit’s decline permanent: Chinese electric vehicles. Canada has sharply reduced tariffs on a limited number of Chinese EVs, opening the door to ultra-affordable models that American automakers cannot match. With no sub-$40,000 electric option left from Detroit, Canadian consumers are primed to choose price and availability over legacy loyalty—just as they did with Japanese brands.

The lesson is brutal but clear. Trade wars do not build dominance; they destroy it. Trump’s threats did not force Canada to submit or bring manufacturing back to the United States. They pushed Canadian buyers away, rewarded competitors who invested patiently, and exposed Detroit’s long-term neglect of the Canadian market. In trying to intimidate America’s closest ally, Trump handed Canada’s auto industry first to Japan—and may soon hand what remains to China.