Ford and GM Will Have to Pay Tariffs on Cars Made in Canada

Ford and GM Will Have to Pay Tariffs on Cars Made in Canada

Joel South

Wed, September 2, 2026 at 3:00 PM GMT+3 3 min read

Quick Read

• $F and $GM face direct tariff bills on cars built in Canada, with Ford already carrying $2B in commodity headwinds and GM absorbing $900M in Q2.

• Canada's dollar-for-dollar retaliation hits September 8 and could force Ford and GM to slash EBIT guidance, pushing Detroit auto stocks lower.

• Chris Lowe flagged Canadian lumber and cabinetry tariffs will drive up housing costs, broadening the consumer hit well beyond autos.

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FHN Financial chief economist Chris Lowe just spelled out the punchline of the new Canada tariff on Marketplace Morning Report: "Even though there are U.S. companies that manufacture in Canada, Ford and GM, particularly they will have to pay tariffs on the cars that are made there. And so that's probably where the biggest impact is."

The tariff aimed at Canada lands first as a bill to two American automakers and then to U.S. car and home buyers.

Trade War With Canada Will Impact Ford and GM Bottom Lines

Last week the U.S. pushed tariffs on $20 billion worth of Canadian goods to 50%, and Canada's dollar-for-dollar retaliation is set to take effect September 8. Lowe added that lumber and cabinetry from Canada will push housing costs up, widening the consumer hit beyond autos.

The market already voted. Ford (NYSE:F) is up 4.8% year to date (YTD) but down 3.12% over the past month, while General Motors (NYSE:GM) is up nearly 7% YTD for the week but down 1.22% over the past month.

Ford lit up Reddit's investing forum around the news, with the driving thread reaching 613 upvotes and 233 comments and sentiment stuck at a bearish 22. Ford's own guidance already assumed roughly $2 billion of commodity headwinds; GM absorbed about $900 million of gross tariff impact in Q2 alone.

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Profit angle: The Sept. 8 retaliation is the next catalyst. Watch for Ford and GM to revise the $10 billion to $11 billion and $14 to $16 billion EBIT ranges. Any cut, and the Detroit trade breaks lower. Any workaround, and the dip becomes the setup.

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