Is there such a thing as a Made in America car anymore?

CBC

28-03-2025

Donald Trump says he wants to see more vehicles made in America. It's a handy slogan and might once have been a viable idea.
The problem is there's no such thing as a Made in America car anymore. And there hasn't been for years.
Since Canada and the U.S. signed the Auto Pact in 1965, auto manufacturers have leveraged the comparative advantage in both countries to make the industry more competitive, production more efficient and vehicles more affordable.
Experts say tariffs would effectively undo those advantages almost immediately.
"It's the same Trump nonsense that is not backed by paperwork that is going to hurt [the] American auto industry worse than it will hurt Canada," said Flavio Volpe, head of the Automotive Parts Manufacturers' Association (APMA).
A case study
Any vehicle made in North America is manufactured via a complex web of interconnected supply chains that use raw materials and parts suppliers that span the entire continent.
Consider the rear assembly of a car made in North America.
That graphic was put together by the APMA. It says it's based on its members' actual contracts. Company names were redacted to respect competitive confidentiality.
Each dot represents a different company providing the material or part required to complete the rear assembly.
To break the process down even further, everything starts as raw material in one country, is shaped into a part in another, then moved again to be assembled into a broader component, before finally being assembled and eventually shipped to a customer.
Rubber is processed in Monterrey, Mexico. It's shaped into a connector in Iowa. That piece fits into the control arm assembly made in Brampton, Ont. The control arm is put together as part of the rear suspension assembly in Detroit. The rear assembly is shipped to Windsor, Ont., for final assembly and eventually sold in California.
The new NAFTA
You could draw up a similar chain for each individual part in any car.
The whole process is only doable when those components can move across borders tariff-free.
That was a key component of the renegotiated North American Free Trade Agreement in 2018. When it was announced, Trump heralded the newly signed Canada-United States-Mexico Agreement as a breakthrough for the American auto industry.
"Once approved, this will be a new dawn for the American auto industry and for the American autoworker," said Trump in 2018.
And yet, as he announced his latest tariff salvo, Trump's proclamation essentially declared his own trade deal a failure.
"I am also advised that agreements entered into before the issuance of Proclamation 9888, such as the revisions to the United States-Korea Free Trade Agreement and the United States-Mexico-Canada Agreement (USMCA), have not yielded sufficient positive outcomes," wrote the administration.
But undoing the status quo will come with enormous cost.
"No car is truly made in just North America," said Patrice Maltais from the industry association Global Automakers Canada.
He says that continent-wide nature of the intricate supply chain cost billions of dollars and took decades to build.
"You have to basically untangle a lot of those supply chains and put new ones down, and that takes a lot of time and it takes a lot of money."
He says a new manufacturing plant could cost anywhere from $2 billion to $10 billion.
"That's just the plant, then you have to look at all the supply chains for that plant."
Even if the automakers actually agreed to move production to the U.S., it would take years to build.
Tariffs would erode industry, experts say
In the meantime, experts say the industry would be clobbered by tariffs.
"You'll feel it almost immediately," said Jan Griffiths, a former American auto executive and founder of the industry association Gravitas Detroit.
WATCH | Carney announces plan meant to help workers affected by tariffs:
Carney announces $2B 'strategic response fund' to help workers affected by Trump's tariffs
2 days ago
Duration 1:47
During a Day 4 campaign stop in Windsor, Ont., Liberal Leader Mark Carney announced that if he's elected prime minister, a $2-billion 'strategic response fund' will be created to help workers affected by tariffs imposed by U.S. President Donald Trump. The fund would help create an all-Canadian network for automobile component manufacturing.
Rather than trying to use tariffs to force change that would cost everyone, she says Trump should offer a viable path forward for Canada, Mexico and the United States.
"If this is about renegotiating USMCA, then let's do it, but let's do it now and let's take the uncertainty out of the system. Businesspeople cannot handle this level of uncertainty," she told CBC News.
But Griffiths says the manufacturing base that once existed in the U.S. "is no longer here." It was long ago replaced by one of the most efficient and most cost-effective manufacturing processes in the world.
Even the threat of undoing that network has already shaken markets, eroded confidence and prompted a nearly unprecedented level of concern among one of the biggest industries on the continent.