To view a symbol of the new trade war between the U.S. and Canada, look no further than the border crossing between Detroit and Windsor, Ontario.
The Ambassador Bridge between the two cities is a major route for automotive shipments between the two countries. A new structure linking Detroit and Windsor, the Gordie Howe International Bridge, is nearing completion.
On Saturday, the administration of President Donald Trump, said it was implementing 25% tariffs on imports from Canada, as well as 25% imports on goods from Mexico and 10% on China.
"President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country," according to a White House statement.
Canada responded with a 25 percent tariff on U.S. goods. "These countermeasures have one goal: to protect and defend Canada's interests, consumers, workers, and businesses," the Canadian Department of Finance said in a statement.
One of the sectors that will be affected in a big way is the trade of vehicles and automotive parts between the U.S. and Canada. Mexico also figures into automotive trade in North America in a major way. Automakers and consumers have been concerned about the Trump administration's tariffs may affect vehicle prices.
The tariffs "would have a massive impact on the auto industry," S&P Global Mobility said in a report last week before the tariffs were announced.
S&P Global Mobility says there about 5.3 million light vehicles made in Canada and Mexico "with about 70% of these destined" for the U.S.
S&P Global Mobility also says "many U.S.-built vehicles use Canadian or Mexican-sourced propulsion systems and component sets; those components would see a tariff as well, increasing costs for vehicles" made in the U.S.
In Canada, automakers including General Motors Co., Ford Motor Co. and Stellantis, which owns the remnants of Chrysler, operate factories in Canada. Toyota Motor Corp. and Honda Motor Co. also produce vehicles in Canada. Those operations are mostly within a four-hour drive from the Detroit-Windsor crossing.
In Canada, there have been strains even before the new tariffs, according to S&P Global Mobility.
"Over the years, production in Canada has waned while production in Mexico has increased, though both are significant," S&P Global Mobility said in its report. "Regardless of automaker, in 2024, S&P Global Mobility estimates that about 54% of U.S. light-vehicle sales were produced in the U.S., 15% in Mexico and just under 7% from Canada."
The newly announced tariffs will intensify automotive trade issues, S&P Global Mobility said.
"A tariff against Canada and Mexico could significantly disrupt the economics of the region," S&P Global Mobility said. "Among the open questions will be how long the tariff might be in play; given the justification is related to immigration and stopping the flow of illegal drugs, what metrics will be in place for Canada and Mexico to meet to see the tariff lifted again?"
For the auto industry, a new period of uncertainty and stress seems to have arrived.