How a car crosses the border seven times
The thing people miss about auto tariffs is that a car is not made in one country. An engine block cast in Ontario goes to Michigan for machining, back to Ontario for assembly into an engine, then to a plant in Ohio to go into a vehicle that is shipped to a dealer in Toronto. Industry groups say some parts cross the border six or seven times before the car is sold.
A tariff is charged each time. So a 25 percent tariff is not a 25 percent cost increase on a car. Depending on how the rules of origin are applied, it can be more, and the paperwork alone is enough to make a plant manager move production to whichever side of the border avoids the crossing. That is the actual threat: not the tax, but the incentive to consolidate on one side, and the bigger market is not ours.
What the 2026 review is
CUSMA, the deal that replaced NAFTA in 2020, has a clause requiring the three countries to sit down in 2026 and decide whether to extend it. If all three agree, it runs another sixteen years. If they do not, it enters annual reviews, which is a polite way of saying permanent uncertainty.
Uncertainty has its own price. A company deciding where to build a battery plant or a stamping line wants to know the tariff rate for the next decade, not the next twelve months. When the answer is 'we will review it every year', the safe choice is to build in the biggest market, and the biggest market is the United States. That is true even if the tariff never actually goes up. The threat does the work.
What the numbers say versus what politicians claim
The claim from Washington is that tariffs bring factories home. The evidence from the 2018 steel and aluminum tariffs is mixed at best. US steel production rose a little, and the price of steel for every US manufacturer that uses it rose more. Studies from the Federal Reserve and the Peterson Institute found the tariffs cost more jobs in steel-using industries than they created in steel-making. The cost per job saved ran into the hundreds of thousands of dollars.
On the Canadian side, the claim is that we can diversify away from the US market. The Ontario export chart above says how far that has to go. Europe and Asia together take about a tenth of what the US takes, and they are an ocean away from a plant in Windsor. Diversification is a twenty-year project, not a policy announcement.
What a Grade 11 student in Richmond Hill should take from this
If you are planning to study business or engineering, the industries that are most exposed are also the ones that hire the most co-op students in this province. Automotive, steel, plastics, machinery. None of them are going away, but the good jobs in them are going to cluster around whichever plants win the consolidation fight.
The practical read: watch the review, but watch investment announcements more. A plant expansion in Ontario means a company decided the tariff risk was survivable. A plant expansion in Kentucky that was originally rumoured for Ontario means the opposite. Those announcements tell you more about the next decade than any statement from a trade minister.