The headlines are loud, but the path for dealers is clear. Between new U.S. tariffs, political posturing, and media buzz, many Canadian dealers are tightening up, or freezing altogether. But let’s clarify what’s actually happening, because smart dealers who stay calm in chaos stand to win.
First, the facts: as we know, the U.S. recently imposed a 25 per cent tariff on all Canadian-manufactured vehicles. Canada responded with reciprocal tariffs, but:
- They apply only to non-CUSMA-compliant U.S. vehicles (less than 75 per cent North American content);
- That affects a relatively small slice of U.S. imports, estimated at less than 50,000 units/year; and
- The policy took effect April 9, 2025
Canada’s reaction was more optics than impact, which is the classic political brinkmanship you’d expect during an election cycle. Meanwhile, in the United States, they are still grappling with an approximately 9 million unit shortfall from the 2020–2023 production gap. This isn’t going away.
What we’re seeing happening on the ground:
- OEMs are quietly pulling back incentives;
- Fleet and rentals are being deprioritized; and
- Retail inventory remains strained, especially in high-demand categories like trucks and SUVs.
And amidst all this Canadian units — clean, late-model, desirable — are still moving.
Now let’s take a look at what could be happening with Canada’s currency, which remains the “great unknown.” The major Canadian banks are forecasting a buoyant Canadian dollar heading into the back half of the year.
But here’s the thing: that might not materialize, especially if Canadian government spending remains high and the U.S. bond market pulls interest upward. Even if it does, the arbitrage advantage doesn’t vanish. It just shifts.
A shortage is a shortage. Market forces won’t disappear just because currencies dance.
Key Takeaways
| What’s Happening | What it Means |
| Tariffs are real, but narrow | Most units are still exportable (1/4/5 VINS) |
| U.S. buyers are short (around 9 million vehicles) | Canadian supply = critical |
| The Canadian dollar may strengthen | But arbitrage still lives |
| OEMs are rerouting quietly | Dealer-level agility matters more |
| Panic is rising | Calm, proactive dealers gain share |
What Canadian dealers should do next:
- Don’t freeze. Noise ≠ signal;
- Lean into high-demand, near-new units (2020–2023), especially SUVs, 4WD, and clean trucks;
- Strengthen/create direct U.S. relationships. The moat between countries isn’t a wall if you’ve built a bridge;
- Track CAD/USD shifts, but don’t let short-term moves shake long-term logic; and
- Remember the principle: If you stay level while others panic, you become the safe choice.
A final word: The moat may be real, but it’s not impassable. Canadian dealers who understand timing, trust, and terrain will not just survive this moment, they’ll quietly expand their empire while others wait for headlines to tell them what to do.
About the Author
Bob Manor is a Canadian-based wholesale strategist and cross-border specialist. With 30+ years in the business, he continues to provide field-level insight to dealers on both sides of the border. For more information visit: www.bobmanor.com or email: info@bobmanor.com
