U.S. President Donald Trump's idea of simply replacing Canada-made vehicles at U.S. dealerships with ones made in America would be a costly undertaking that's easier said than done, according to a new report.
And, in the short term, a 25-percent tariff on vehicles imported from Canada—threatened by Trump—would hurt U.S. consumers' pocketbooks.
Canada exports about 1.5 million vehicles to the U.S. per year, accounting for about 8-9 percent of all U.S. new-vehicle sales each year, TD Economics said in a study, "Setting the Record Straight on Canada-U.S. Trade."
"The U.S. could conceivably look to shift this production stateside," the report said, warning, however, that there are "significant near-to-medium term challenges to replacing Canada's annual exports."
"To fill that gap, the U.S. would need to raise production by more than 10 percent relative to current levels," the report said. "Based on the average production capacity of 225,000 units for existing assembly plants, that would mean roughly six new plants would be required."
Five auto makers build vehicles in Ontario. Among the vehicles assembled in that province, three are their respective brand's top-selling vehicle in the U.S., according to the Automotive News Research & Data Center in Detroit.