The U.S. and Canada have both recently enacted trade tariffs, with J.P. Morgan breaking down what the implications could be for the automotive industry in a recent article.

On Aug. 22, 2026, a 50% tariff was put in place by the U.S. on a range goods from Canada including wine, cement, and hockey sticks, impacting $20 billion worth of product from the country. In addition, U.S. President Donald Trump has also said he plans to raise tariffs on Canadian autos and auto parts to 50% beginning Jan. 1, 2027.

In response, Canada implemented retaliatory tariffs on $20 billion of U.S. goods that began Sept. 8. Approximately 700 products face tariff rates of 15% to 50%, impacting items such as steel, dairy, paper, and appliances.

J.P. Morgan noted that, though the tariffs are small relative to the larger U.S. import base, they are likely to raise prices in specific areas, including automotive repair. With a 50% tariff on Canadian autos and related components being enacted, it could impact not just the price of new and used vehicles, but also the price and availability of repair parts.

Even if prices don’t skyrocket, simply needing to wait longer for certain components would require more time to complete a repair order. That alone would create pricing pressures and make it more likely for prices to be passed to consumers.

It won’t be the tariffs alone to keep an eye on, but what happens afterwards. J.P. Morgan cautions that the worst signs of economic outlook would include the impact of tariffs reaching beyond finished vehicles into parts and components; whether implementation timelines are tight with limited exemptions; and if companies are raising prices broadly, as opposed to absorbing costs through margins.