Tariff Surge, EV Mandates, and Magnet Supply Shakeup

U.S. tariffs on vehicles and parts from Canada surged to about US$380 million in July, part of nearly US$1.4 billion in duties levied on automakers and suppliers across Canada and Mexico this year.

Automakers warn that unpredictable tariff expansions complicate capital planning and make U.S. investments harder to justify, since sudden duty shifts can upend sourcing and production economics across tightly integrated North American supply chains.

The EV regulatory picture is adding pressure. If zero-emission vehicle sales do not accelerate, compliance costs could balloon: manufacturers may need to purchase billions of dollars in credits under existing EV mandates, which require a rising share of new light-vehicle sales to be zero-emission, including plug-in hybrids.

On the supply side, Neo Performance Materials has signed a preliminary supply deal with Bosch and is nearing commercial production at a new rare-earth magnet plant in Europe, a development that could ease motor and inverter supply constraints for electric drivetrains and reduce dependence on long, geopolitically sensitive supply chains.

Other industry moves include suppliers using in-house AI to cut production costs, and OEMs outlining expanded EV and hybrid lineups through 2030. Policymakers and manufacturers are negotiating tariff, import, and regulatory adjustments as the sector adapts to rapid electrification and trade volatility.