An auto consultancy based in the Detroit area has forecast that if the global trade war intensifies, vehicle sales in the United States and Canada could decrease by 1.8 million units this year and stagnate over the next decade.
According to Monday’s Telemetry forecast, if the current tariffs remain in place through 2035, sales of light vehicles in the U.S. and Canada would drop by about 7 million units from the 24.6 million units projected in a scenario without trade conflict and with strong economic growth.
President Donald Trump’s 25% import tariff on automobiles took effect on April 3.
Vehicles produced in Mexico and Canada are subject to the tariffs. However, automakers that comply with the United States-Mexico-Canada Agreement (USMCA) can receive deductions based on the value of American content.
The Trump administration has also imposed reciprocal tariffs at different rates on various countries not covered under the USMCA, unlike Canada and Mexico.
The tariffs have pressured General Motors to increase truck production at its Indiana plant, while Stellantis has temporarily halted production at two plants in Mexico and Canada, affecting five related facilities in the United States.
Automakers, including Ford Motor Company and Stellantis, have expanded incentive offerings to ease consumer concerns over price hikes resulting from the tariffs.
Analysts predict that continued tariffs could increase vehicle prices by several thousand dollars, a warning echoed by the automakers.
Although the recent surge in electric vehicle (EV) sales has slowed, Telemetry projects that battery electric vehicles (BEVs) will reach 40.5 million units in sales globally over the next decade, becoming the most common powertrain worldwide.
In a scenario without trade conflict and with strong economic growth, the firm expects sales of BEVs in Canada and the United States to reach 8.8 million units, especially as options like extended-range EVs become more widely available.
