Trump Tariffs On Canada Will Hit Toyota And Honda Hardest – Jalopnik

Happy Monday! It’s August 31, 2026, and that is The Morning Shift — your day by day roundup of the highest automotive headlines from around the globe, in a single place. This is the place you will discover a very powerful tales which can be shaping the best way Americans drive and get round.

In this morning’s version, we’re fallout at Toyota and Honda from tariffs on Canada, and Volkswagen’s union employees in Germany placing up a struggle towards cuts. We’ll additionally have a look at Nissan and Honda’s newest collaboration, and the state of the lithium market. 

If you need a recap of the most recent auto information despatched to your inbox every weekday, you possibly can join Jalopnik’s free Morning Shift publication right here.

Not content material with commerce wars towards our extra distant allies, the Trump administration has now spun up a commerce warfare towards our closest neighbors. Unfortunately for that warfare, years of cooperation between the U.S. and Canada have meant that firms have lengthy arrange cross-border outlets — and now, these firms must reckon with wild pricing swings. From Automotive News: 

U.S. President Donald Trump is focusing on Ottawa with a proposed 50 % tariff on Canadian automobile imports — however Japan’s Toyota and Honda might find yourself footing the invoice.

The two Japanese automakers account for greater than three-quarters of all vehicles made in Canada. They could possibly be pressured to shutter some manufacturing traces if the tariffs go into impact on January 1 as proposed, analysts stated.

While a deal might nonetheless be reached, the timing of the U.S. tariffs could not be worse, as Japanese automakers are being stung by competitors from low-cost Chinese EVs in markets resembling Southeast Asia, Europe and Latin America.

The United States stays Toyota and Honda’s greatest market and, crucially, one the place Chinese rivals resembling BYD should not allowed in.

Canadian-built vehicles accounted for nearly 1 / 4 of Honda’s U.S. gross sales and 17 % of Toyota’s final 12 months, probably the most amongst main automakers, in response to Barclays analysts. As a outcome, the 2 face the largest potential hit from Trump’s plan to double the levies from the present 25 %.

“If you really wanted to destroy the Canadian auto industry, you could with these tariffs,” stated Julie Boote, autos analyst at Pelham Smithers Associates in London.

Both firms would possible have to shut a few of their Canadian meeting traces, she stated.

Remember when Akio Toyoda hosted a NASCAR occasion at Fuji Speedway whereas sporting a Trump-Vance shirt? I ponder if he feels that is aged effectively. 

Volkswagen CEO Oliver Blume needs to chop the corporate’s prices, paring down its factories and employees till little stays. The employees are, as one may think, not tremendous stoked about this. They’re saying such a transfer can be in battle with prior agreements between the corporate and union IG Metall, they usually’ll pull out all of the stops to forestall layoffs. From Reuters:

FRANKFURT, Aug 31 (Reuters) – Germany’s largest union, IG Metall, on Monday warned of most resistance to any efforts by ​Volkswagen to unwind a beforehand agreed restructuring bundle, stopping brief ‌of threatening strikes forward of an important board assembly on the finish of the week.

Volkswagen’s administration and unions have been buying and selling blows since July over what might develop into ​the automaker’s greatest overhaul thus far and embody plant closures, ​the carve-out of some divisions and one other 50,000 layoffs.

This would ⁠come lower than two years after the newest bundle was ​agreed, which adopted months of crunch talks in addition to warning strikes ​as Europe’s high carmaker tries to deal with tariffs, Asian rivals and a weak Chinese market.

“I can only warn you: If the board tries to call this agreement ​into question again, then the factory floors will be up in ​arms at all our sites,” Thorsten Groeger instructed employees at a workers gathering in ‌Hanover, ⁠one of many websites that faces closure.

I’m firmly on the facet of the employees right here. If you promise individuals a job, work in a restructuring settlement that you just’re prepared to log off on, you should not pull the rug from underneath them. 

Nissan and Honda might now not be merging, however the two firms nonetheless appear inquisitive about splitting prices. This is particularly true for software program, which generally is not the core competency of an automaker. From the Wall Street Journal:

Nissan Motor and Honda Motor have agreed to collectively develop key techniques and software program that type the core of next-generation automobiles, after a deliberate merger fell by means of final 12 months.

The Japanese automakers stated Monday that they signed a joint improvement settlement and intention to undertake the structure incorporating the collectively developed techniques and software program of their automobiles from the fiscal 12 months beginning in April 2029.

By standardizing these applied sciences, Nissan and Honda intention to leverage their mixed engineering experience and sources to enhance competitiveness by means of decreased improvement prices and better economies of scale, the 2 firms stated.

I know {couples} like this in Brooklyn, who announce they’re getting collectively earlier than breaking apart however by no means totally leaving one another’s lives. Always works out nice. 

As electrical car gross sales have surged, so has curiosity in lithium — a core element of batteries. With EV curiosity really fizzling out within the enormous market that’s the United States, one may think lithium costs to be dropping, however one can be mistaken. Instead, datacenters have pushed even additional demand. From Bloomberg:

Lithium producers from China to Australia have posted bumper earnings as demand from the fast-growing power storage sector boosted costs for the battery metallic.

Major Chinese producers Tianqi Lithium Corp. and Ganfeng Lithium Group Co. every reported their strongest internet earnings in three years for the primary half of the 12 months, with the previous forecasting a decent marketplace for the remainder of 2026 attributable to rising demand and “disruptive factors” for provide.

China’s globally-watched spot worth for the battery materials surged 22% over the primary half as power storage emerged as a significant demand supply as a result of development of information facilities and renewable energy. This comes after the lithium market had been unstable for a number of years attributable to a speedy build-out of provide.

Datacenters want steady energy, and steady energy can come from batteries within the type of uninterruptible energy provides. Those want lithium like the rest, so this is hoping we do not geta Rampocalypse for EV batteries. 

From the excessive seven cent vary to the low eights. Will society ever get well? 

I’ve been having a good time with this report not too long ago, particularly with the primary, type of overture monitor.