Canada Is Building A Car Market That Doesn’t Need The United States

I was in church the other day and was excited to see a friend who had recently moved back to Canada. You can’t miss this guy, because he’s a giant Ontario farm boy of Dutch heritage. The Dutch know hard work, but that didn’t stop him from getting laid off here in the U.S., forcing him to move back home.

Even he, a fairly worldly fellow, was surprised by the current sentiments towards the U.S. when he crossed the border. I don’t think most Americans quite grasp both the depths of Canadian consternation and how hard it is to make a Canadian get that mad. He invited me up to watch a NASCAR Pinty Series race, and I asked him if I’d take some heat for being American. He laughed. “No, of course not, we’re still Canadian,” was his answer.

American people are welcome, but American products are a tougher sell. He said that the local liquor store was telling people to buy the American spirits they like now, because they weren’t ordering any more. For now, most of the boycott seems to be localized to brown liquors. Are cars next? It’s not a crazy thought, given Canada’s announcement that it’s lowering the tariff on Chinese cars.

Put on your buckets, today’s Morning Dump is going to be a little controversial, and I just ask that we all respect one another as we work our way through some challenging times. While Canada and China are buddying up, German companies like Porsche are having to deal with slumping sales in that country. China remains the world’s biggest battery supplier, and Ford is having to squash a rumor that it was looking to buy batteries from BYD.

Tesla does huge business in China and tends to avoid a lot of static for it, but it’s still facing a NHTSA investigation here in the United States. The company asked for an extension because there were too many incidents to review.

Canada And The United States Suddenly In A… Heated Rivalry

The President recently told the world that Americans don’t need Canadian products, seemingly as a way to dismiss the United States-Mexico-Canada Agreement (USMCA, or CUSMA as they call it up north). Per The Canadian Press:

U.S. President Donald Trump said Tuesday the Canada-United States-Mexico Agreement on trade is “irrelevant” to him and Americans don’t need Canadian products.

“It expires very shortly and we could have it or not,” Trump said while touring a Ford plant in Michigan. “It wouldn’t matter to me. I think they want it. I don’t really care about it.”

Clearly, President Trump isn’t up on all the Jacob Tierney-produced, Hockey-based television Americans are devouring. In addition to Heated Rivalry, a new season of Shoresy better be coming to Hulu in a few weeks. Also, who doesn’t appreciate some Alberta Beef and all-dressed chips?

The better question might be: What does America export to Canada? Besides booze, the answer is that America exports a lot of cars (and also builds a lot of cars there). For historical, geographical, and regulatory reasons, a lot of vehicles travel between the two countries.

Or, at least, that’s what used to happen. As Bloomberg reports, the number of exports from the United States is falling dramatically:

US factories’ share of the Canadian vehicle market has tumbled to a new low, as automobile tariffs upend an industry that for decades enjoyed tight cross-border integration.

Just 36% of passenger vehicles imported to Canada were manufactured in the US during the first 10 months of 2025. That compares with an average of 49% in the 10 years before that, according to Statistics Canada imports data.

Canada is the largest buyer of American-made new cars and trucks, by far. But the numbers help illustrate how the trade war started by President Donald Trump’s administration has changed the business. Mexican and South Korean-made vehicles are gaining a bigger share of sales at Canadian auto dealers.

In response to President Trump’s tariffs and the risk of losing out in a renegotiated USMCA, American car companies have shifted production away from Canada to the United States, which has royally upset Canadian leaders. Canadians also seem irked by the suggestion that Canada should become the 51st state and, recently, over similar, uh, ‘discussions’ about its neighbor, Greenland.

I don’t think the U.S. and Canada can exactly extricate themselves from one another so easily, and American brands could still produce cars in Canada for the local market if it came to that. The other alternative is that Canada could allow more Chinese cars into the country, which, yup, that’s what’s going to happen.

From the CBC:

“It’s a partnership that reflects the world as it is today, with an engagement that is realistic, respectful and interest-based,” Carney told a news conference in Beijing.

Carney said Ottawa expects Beijing to drop canola seed duties to 15 per cent by March, and called that “enormous progress.”

Saskatchewan Premier Scott Moe said in a social media post that the break on canola tariffs “demonstrates the importance of foreign trade missions and shows what can be achieved when the federal and provincial governments and our export industries work together to strengthen our trade relationships.”

Canadian canola meal, lobsters, crabs and peas will no longer be subject to Chinese “anti-discrimination” tariffs from March to at least the end of the year. There was no mention of canola oil.

In return, Canada will allow up to 49,000 Chinese electric vehicles into the Canadian market each year, at a 6.1 per cent tariff.

That’s less than 5% of the total market, but presumably those will be almost entirely electric vehicles or PHEVs. As if to rub it in, Canadian Premier Carney said that working with China is now “more predictable,” which feels like a dig at the United States. More pointedly, he said: “We fundamentally stand up for human rights, for democracy, territorial integrity, rights to self-determination.” That’s a crazy argument to make when talking about signing a deal with China, a country that doesn’t regularly respect any of the above, but there’s definitely a way to read that as a dig at the United States as well.

Mexico has taken a somewhat different approach, having recently upped tariffs against Chinese EVs. Will it matter? Who knows, but Mexico already surpassed the United States in auto exports to Canada at least once last year.

I don’t know where this goes, but I assume it’s not good, other than Thomas getting to drive a bunch of interesting Chinese and South Korean cars we don’t get. If it goes tarps off between the USA and Canada, he’s threatening to cut his article word count by 15%.

China Helps Take Down Porsche, Also Germany

The United States was the one major market where Porsche had an ok year, but sales were still ten-ply. Everywhere else? Woof. Germany is down 16%, and China is down 26%.

Per Automotive News Europe, there are a lot of challenges facing the company’s new CEO:

Porsche has struggled with a range of challenges, including correcting an overly ambitious battery-electric vehicle rollout that upended model plans and weighed on margins. Tariffs in the U.S., which has surpassed China as Porsche’s most important market, have also weighed on profit.

The automaker stopped selling combustion engine versions of the Macan and the 718 Boxster and Cayman in Europe because their older digital architectures did not meet new EU cybersecurity regulations.

Given where emissions standards are in the United States, my advice is for the company to produce a new V8-powered 928 built in Tennessee.

Ford Is, Or Isn’t, Thinking About Using BYD Batteries Abroad

BYD makes a good battery, historically, and plenty of automakers have used them in their own cars (including Tesla). Would Ford consider it? A report from Keith Naughton, via The Detroit News, suggests there’s at least been a discussion about it and some pushback.

The potential pact with BYD drew immediate political blowback, with White House trade adviser Peter Navarro and Michigan member of Congress questioning the deal.

House China Panel Chair John Moolenaar, R-Caledonia, said Ford “should work with our allies, not our adversaries.”

“If reports that Ford is in discussions to potentially partner with a second Chinese battery company were to come true, it would diminish Ford’s status as an iconic American company,” Moolenaar said in an emailed statement.

Ford already uses Chinese batteries in some of its EVs sold in China, but this reportedly would be for the company’s hybrids. Tesla does a ton of business with BYD, so it’s odd that Tesla doesn’t seem to get any negative attention for it.

Tesla Asks For Extension To Review FSD Issues

A probe from the National Highway Traffic Safety Administration into incidents involving Tesla’s ADAS systems isn’t going to be resolved soon, as Tesla has asked for (and been granted) an extension to review all the issues.

According to Bloomberg, NHTSA is looking into incidents where FSD-equipped vehicles violate safety laws, as well as the car’s ability to sense objects during fog or other reduced visibility situations:

In the extension request Tesla sent to NHTSA this week, the carmaker complained it was dealing with a pileup of queries from the regulator. On top of the agency’s questions about FSD and traffic violations, the company simultaneously has been preparing responses to NHTSA’s probes into delayed crash reports and inoperative door handles.

Having to reply to three large information requests in short order “is unduly burdensome and affects the quality of responses,” Tesla said.

You know what’s also burdensome? Having your public roads used as a beta test for a technology, so Tesla should expect public scrutiny.

What I’m Listening To While Writing TMD

This morning, I nearly fell out of bed when I discovered that Mitski posted something to her Instagram account, which is like only the 4th time that’s ever happened. She’s got a new song! This is a big deal in my world. Please enjoy “Where’s My Phone?” and its Rapunzel-as-shot-by-third-year-UMASS Amherst Film Studies video.

The Big Question

What’s your favorite Canadian car, product, tv show, actor?

Top photo: BYD, Toyota, Audi