Here’s How Interconnected The American And Canadian Auto Industries Are

The last film released that starred the great John Candy is the Michael Moore-written/directed comedy “Canadian Bacon,” which has the ridiculous premise of the United States and Canada going to war. That this movie was supposed to be a farce is a good temperature check on the present.

Canada, Mexico, and the United States are in a little bit of a trade war, although a somewhat muted one for the moment. If you’re a regular reader of The Morning Dump, you’re probably aware that Canada has been seen as such a strong trading partner with the United States that parts from the US and Canada aren’t even differentiated.

I’ll start the morning with a look at one part going across the border to demonstrate just how complexly linked the two countries are. Then I’m going to look at the range of parts across EVs, which I can do thanks to a new report that shows just how “American” different cars are.

Canada is retaliating, though the extent of that retaliation may depend a little on the next election. They’re not the only ones, as Europe and China each chart a strategy for responding to the latest round of tariffs. That’s all pretty heavy, so let’s end the week on news about tradespersons in Europe doing yoga.

Let’s Follow One Transmission Across The Border

Open trade between the three major North American countries has been a given for most of my life, starting with the signing of the North American Free Trade Agreement by President Clinton in the early ’90s through the much-needed revision by President Trump in his first term, which created the United States-Mexico-Canada Agreement (USMCA).

The concept behind this open trade was to create a more efficient way of building cars that could lean on the various competencies and favorable conditions each country provided. America brings the brands and expertise, Mexico brings the cheaper labor, and Canada provides both cheap labor and cheap energy. That’s oversimplifying it, but you get the point.

A new report from independent research firm IDTechEx provides an interesting look at where EVs sold in the United States come from and, because tariffs also apply to parts, the percentage breakdown by vehicle. Above is a fun chart showing the various EVs sold in the United States, how popular they are, and where most of the value comes from. As you can see, about 50% of all EV component value in the United States came from abroad.

Here’s a fun fact that makes figuring all of this out a little wild. Because of the American Automobile Labelling Act, for the last 35 years, there’s been no differentiation between components made in the United States or Canada.

The mix of cars here is interesting. A Tesla Model Y/Model 3/Model S has a lot of components from the United States or Canada, and those dominate sales. The Georgia-built Kia EV6 seems to be the most American EV, though the Volkswagen ID4 is close to both it and the Teslas.

IDTechEx tracks one transmission for an unnamed vehicle, and the journey is complicated, crossing the border with various parts at least seven times. Scrap is sent from Ontario to Pennsylvania, with steel then sent to Ohio, where it’s presumably processed and then sent back to Ontario. The housing and other parts come from Mexico and Illinois. All of this is bundled together and sent to a facility in the Midwest (presumably Michigan) where the final transmission is assembled. That transmission is then sent back to Ontario, where it’s put into a vehicle, which is then sold all across North America.

While IDTechEx doesn’t name the vehicle, my guess is it’s the Chrysler Pacifica PHEV.

It sounds a little crazy when you see it listed out like that, but if it wasn’t the most efficient way to do it from a margin standpoint, then companies wouldn’t do it. Of course, it’s possible that local governments provided additional enticements to make building a specific plant in a specific place more attractive, and the steel tariffs might be why scrap steel is sent to Ohio to be turned into automotive-grade steel.

How much will that one transmission cost after all these tariffs? It’s not clear. Will any tariffs accumulate? Also not clear.

The Period Of America’s ‘Global Economic Leadership’ Is Over, And That’s ‘A Tragedy’ Says Canadian PM

Oh, right, there’s also the South Park movie. That’s a comedy premised on the idea of the United States and Canada going to war. Wow. We’re living in South Park, but South Park is the whole country.

Conspiciously missing from yesterday’s tariff charts, the one with the retaliatory tariffs against penguins, were the other USMCA countries. What’s the deal? It turns out that Canada and Mexico are mostly spared, though the 25% tariff on non-USMCA-compliant parts and cars is still on the table.

How is Canada responding?

“The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy,” said the new Prime Minister Mark Carney, who is up for election at the end of the month.

Up until now, it was assumed that the Liberal Party that Carney leads was doomed, but the PM’s response to this trade war with Canada has given the Liberals a huge surge in recent polling.

Canada will also impose the same 25% tariff, albeit not on parts, because that’s harmful to auto workers in its own country. The damage is already being felt in the United States, where Stellantis says it’ll temporarily lay off workers in response. The country’s Conservatives are also not pleased, stating that they’d remove taxes for Canadian-built cars.

Where this stops, no one knows.

The EU And China Aren’t Happy Either

These are global tariffs, so let’s check in on America’s other longstanding allies. First up, via The Guardian, here’s the view from the EU:

European leaders have condemned Donald Trump’s tariffs as “fundamentally wrong” and creating an “immense difficulty for Europe”, while appealing for last-ditch negotiations to avert an all-out trade war.

The French president, Emmanuel Macron, said Trump’s decision to impose tariffs was “brutal and unfounded” and appeared to call for a suspension of French investment in the US until the tariffs were clarified.

“Future investments, investments announced in the last weeks, should be suspended for a time for as long as the situation with the United States is not clarified,” Macron told a meeting of French companies.

Suggesting measures against the US tech sector “where the United States benefits enormously from Europe”, he added: “Nothing is excluded. All the elements are on the table.”

Got it. And what about China? From Nikkei Asia:

China on Friday announced an additional 34% tariff against all U.S. goods and added more American companies to its export control and unreliable entity lists, responding to President Donald Trump’s “Liberation Day” tariffs.

The additional Chinese tariffs will take effect at 12:01 p.m. on April 10, according to a statement on the website of the Customs Tariff Commission of the State Council. Goods that departed from the place of origin before that time, and those that are imported until midnight on May 13, 2025, will be exempted from the additional levy.

These announcements, as well as everything else, are hitting the market hard. Don’t look at your 401k, you’re just gonna have to trust me.

More Than Half Of British Tradespeople Enjoy Mindfulness

Let’s end on some good news. Let’s have a larf. According to Isuzu, more than half of British tradespersons enjoy “mindful activities, such as yoga.”

Why was this survey done?

The outdated image of the British tradesperson as a pie-eating, tea-drinking, white van-driving stereotype is officially a thing of the past. New research from Isuzu UK reveals that today’s tradespeople are embracing a modern, mindful, and environmentally conscious lifestyle. From yoga and meditation to skincare routines and electric vehicles, this new generation is challenging perceptions and proving that being a skilled tradesperson is about much more than just the job—it’s a way of life.

[…]

More than one in five (22 percent) have a nightly skincare routine and 19 percent drink herbal tea instead of the stereotypical milk and two sugars.

Three quarters (74 percent) of modern tradespeople would rather have something healthy like a salad or wrap than a pie or pasty, while 10 percent even meditate.

Wolf whistling out of the window (43 percent), saucy images stuck to the inside of the van (41 percent), empty junk food pockets cluttering up the footwell (39 percent) and cigarette butts dotted around the vehicle (35 percent) are all considered the most outdated stereotypes, along with fluffy dice hanging from the rearview mirror (34 percent) and empty energy drink cans (28 percent) on the floor.

I’ve been to England a lot recently and, while these stereotypes might be outdated, the smoking thing is still very real.

What I’m Listening To While Writing TMD

It’s South Park‘s creators performing “What Would Brian Boitano Do?” from the South Park movie about the United States going to war with Canada, a thing that no longer seems entirely far-fetched.

The Big Question

Who is your favorite Canadian artist, race car driver, or actor/actress?

Top photo: IDTechEx, Stellantis