Not even one year into his presidency, President Donald Trump is already having a direct impact on the Canadian auto industry. His words and actions are sure to be felt in both new and used car markets, now and in the future. Let’s look at some of the ways he’s directly and indirectly causing change.
Trump and His Many Tariffs
President Trump has a lot to say when it comes to doing business with other countries, and he is known for his very nationalistic approach. He has promised to “make America great again,” a slogan he backs by being tough with negotiations on imports and exports.
He has proposed trade tariffs with an assortment of nations, both big and small. Back in April of 2017, President Trump initiated tariffs on Canadian lumber. There’s even a debate over dairy tariffs, and some have speculated that this could turn into a trade war between the U.S. and Canada. That would definitely not be a good thing, and it would be attributed solely to the Trump presidency, as Canada and the U.S. have gotten along fairly well during previous administrations.
Trump and NAFTA
One of President Trump’s campaign promises was to take another look at the North American Free Trade Agreement (NAFTA), and that will directly affect auto sales in Canada—most likely in a negative way. President Trump believes that previous presidents have been too lax when it comes to making these sort of agreements, and he is on a mission to correct these perceived weaknesses.
After failing to repeal Obamacare and getting into recent trouble for the way he reacted to Charlottesville, look for President Trump to double up on this promise and try to score a win for himself and his base. Trade between Mexico, Canada, and the United States may be in for an overhaul, or he may fall flat on this promise.
Trump and the Canadian Dollar
So far, President Trump has weakened the Canadian dollar through the tariffs he’s imposing. This makes it hard for Canadians to manage their monthly expenses because their dollar doesn’t go as far as it used to. When it comes time to buy a car, this will leave less room for a monthly payment, forcing some to take out long-term car loans to get their payments reduced.
Trump and Oil Prices
Having Donald Trump as the President of the United States has caused a lot of global unrest. It is still unclear how this will affect oil prices in the long term. If oil prices rise, as they’ve done recently, the Canadian dollar will likely weaken more, as it has historically done. A weak Canadian dollar leads to economic woes in the form of delinquent loans of all types, including car loans.
The Bigger Picture
All of this pales in comparison to the overall global effect President Trump has, with some extreme opinionists bracing for a war between the United States and North Korea after recent statements from both sides. Economic uncertainty is running high, and investors are selling off their shares of stock due to these kinds of developments.
These large-scale factors all have a trickle down effect on the Canadian economy in general, and it is unclear what sort of impact it will have over the next three to eight remaining years of a Trump administration.
What Can Be Done?
While there isn’t much that you can do about who is the current president of America, you can still tighten things up in your own world. Be extra careful not to enter into a car loan that only drags you down faster. Look at your monthly budget to see where you can cut any costs. Find a reliable car that you like that doesn’t break the bank, and pay it off as fast as you can.
Keep an eye on worldly events as they unfold, and try to determine how it relates to both the Canadian economy and your own local economy. Follow the Canadian dollar closely, and be aware of any sudden drops or increases.
We’ve Got You Covered
We can put you in the right car, at the right monthly price, so you’ll have one less thing to worry about. At Ride Time, we listen to what you need and do our best to make it happen. Stop in today to see everything we can do for you.