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States Most Likely to be Impacted by Tariffs on Canadian Auto Imports

After imposing tariffs on imported aluminum and steel in May 2018, the Trump administration is considering a new tariff of up to 25 percent on automobiles and auto parts.

President Trump and his team cite national security concerns as the basis for raising tariffs. As the President put it, “It’s economic. It’s the balance sheet. To have a great military, you need a great balance sheet.” The Commerce Department similarly noted that imported vehicles create risk to national security by reducing domestic technological development.

Detractors of the potential automotive tariff argue that it would damage the automotive industry both in the U.S. and abroad. LMC Automotive forecasts that the rise in prices American drivers would face as a result of the tariffs could lead to a loss of up to 2 million new vehicle sales in 2018, which is more than 10 percent of predicted sales for the period. And Automotive News estimates that expected counter-tariffs would reduce domestic auto production by four percent and cost 624,000 jobs.

Of most relevance to domestic drivers is the fact that the proposed 25 percent tariff wouldn’t just impact foreign models. Some of the most popular vehicles in the U.S. are manufactured in Ontario, Canada and would be affected by the new tariff. These vehicles include models from Dodge, Ford, Chevrolet, and other American automakers, as well as some Toyota and Honda models (including the Toyota RAV4 and Honda Civic). The imposition of tariffs on these vehicles would cause prices to rise in the U.S., resulting in a  slow-down of new vehicle sales.

So which drivers would be most impacted by the imposition of automotive tariffs? The complex supply chain of the global automotive market makes it difficult to answer definitively, but Insurify’s data scientists analyzed their proprietary data to discover where Canadian-manufactured vehicles are most popular. Consumers in these states are the ones most likely to be affected by the tariffs due to their preference for these models. Following are the states with the most Canadian-manufactured vehicles on the road.

Methodology


Insurify provides car insurance quotes based on customers’ answers to questions about driving history, vehicle type, and other personal data. The rankings in this article are based on a set of 1.4 million auto insurance shopper applications. The list of cars manufactured in Canada comes from the 2017 and 2018 National Highway Traffic Safety Administration AALA data and, for purposes of this analysis, only includes makes/models that are assembled exclusively in Canada. This includes: the Cadillac XTS, Chevrolet Equinox, Chrysler 300, Chrysler Pacifica, Dodge Challenger, Dodge Charger, Dodge Grand Caravan, Ford Edge, Ford Flex, Honda Civic 2D, Lexus RX450h, Lincoln MKT, and the Lincoln MKX.

Vehicles that are assembled both in Canada and the U.S. (including the Toyota Corolla and RAV4) have been removed from the list. Data on new vehicles sales and average MSRP comes from the Auto Alliance’s data on the industry’s contribution to state economies.

States with the most Canadian-manufactured vehicles



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20. Kansas


Percent of vehicles produced in Canada: 5.48%
Total new vehicle sales 2016: 101,985
Average new car MSRP: $34,002


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19. Minnesota


Percent of vehicles produced in Canada: 5.48%
Total new vehicle sales 2016: 247,334
Average new car MSRP: $34,049



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18. Kentucky


Percent of vehicles produced in Canada: 5.52%
Total new vehicle sales 2016: 145,795
Average new car MSRP: $32,353



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17. Ohio


Percent of vehicles produced in Canada: 5.60%
Total new vehicle sales 2016: 600,153
Average new car MSRP: $31,609



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16. Illinois


Percent of vehicles produced in Canada: 5.64%
Total new vehicle sales 2016: 641,876
Average new car MSRP: $32,657



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15. North Carolina


Percent of vehicles produced in Canada: 5.72%
Total new vehicle sales 2016: 447,137
Average new car MSRP: $32,042



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14. Georgia


Percent of vehicles produced in Canada: 5.73%
Total new vehicle sales 2016: 487,689
Average new car MSRP: $32,069



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13. Maryland


Percent of vehicles produced in Canada: 5.77%
Total new vehicle sales 2016: 330,140
Average new car MSRP: $31,712



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12. Arizona


Percent of vehicles produced in Canada: 5.80%
Total new vehicle sales 2016: 375,331
Average new car MSRP: $31,772



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11. New Jersey


Percent of vehicles produced in Canada: 5.82%
Total new vehicle sales 2016: 573,898
Average new car MSRP: $33,575



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10. Mississippi


Percent of vehicles produced in Canada: 5.93%
Total new vehicle sales 2016: 122,186
Average new car MSRP: $32,800



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9. Arkansas


Percent of vehicles produced in Canada: 6.12%
Total new vehicle sales 2016: 130,713
Average new car MSRP: $33,988



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8. Indiana


Percent of vehicles produced in Canada: 6.15%
Total new vehicle sales 2016: 242,972
Average new car MSRP: $32,853



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7. Wisconsin


Percent of vehicles produced in Canada: 6.15%
Total new vehicle sales 2016: 253,758
Average new car MSRP: $33,420



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6. Texas


Percent of vehicles produced in Canada: 6.23%
Total new vehicle sales 2016: 1.52 Million
Average new car MSRP: $33,859



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5. South Carolina


Percent of vehicles produced in Canada: 6.24%
Total new vehicle sales 2016: 223,895
Average new car MSRP: $32,031



Photo Credit: Pixabay

4. Oklahoma


Percent of vehicles produced in Canada: 6.29%
Total new vehicle sales 2016: 740,265
Average new car MSRP: $31,683



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3. Delaware


Percent of vehicles produced in Canada: 6.34%
Total new vehicle sales 2016: 49,570
Average new car MSRP: $32,118



Photo Credit: Pixabay

2. Iowa


Percent of vehicles produced in Canada: 6.82%
Total new vehicle sales 2016: 133,581
Average new car MSRP: $34,860



Photo Credit: Pixabay

1. Michigan


Percent of vehicles produced in Canada: 8.47%
Total new vehicle sales 2016: 635,873
Average new car MSRP: $33,787