Canadian auto leaders emphasize the importance of maintaining strong trade ties within North America, cautioning against shifting focus toward China amid upcoming USMCA negotiations. Lucid cuts 12% of its workforce despite ramping production, while BMW appoints a new Americas leader. The U.S. Supreme Court struck down Trump's reciprocal tariffs, but key auto tariffs remain under different laws, leaving the industry largely affected by ongoing duties. The episode explores the complex geopolitical and economic dynamics shaping North American auto trade, including the delicate balance Canada must strike between China and its continental partners.
"Lucid is cutting hundreds of jobs, about 12% of its global workforce, as the EV maker works to streamline operations and improve profit margins."
Lucid is a company that makes fancy electric cars. They want to make cars that go far on a single charge and look nice.
Lucid is an American electric vehicle manufacturer known for luxury electric cars with high performance and range. They focus on competing in the premium EV market segment.
"Lucid produced about 18,000 vehicles last year, more than double in 2024, but it's still wrestling with production challenges and rising costs that hammered the industry in 2025."
Making cars can be hard because of problems like not having enough parts or workers. These problems slow down how fast cars get made.
Production challenges refer to difficulties automakers face in manufacturing vehicles efficiently, such as supply chain issues, labor shortages, or technical problems. These can delay deliveries and increase costs.
"And BMW Group is sending Sean Green to run many of the Americas starting May 1st. Green is a 35-year company veteran who most recently led BMW Group China."
BMW Group is a big car company from Germany that makes fancy cars and motorcycles. They own brands like BMW, Mini, and Rolls-Royce.
BMW Group is a German multinational company that produces luxury vehicles and motorcycles under brands such as BMW, Mini, and Rolls-Royce. It is known for its performance-oriented cars and engineering.
"USMCA is by far the best thing to happen to the auto industry as a whole. Yes, did Ontario in Canada lose manufacturing when NAFTA came into place?"
USMCA is a trade agreement between the US, Mexico, and Canada that helps these countries work together on making and selling cars and parts.
USMCA stands for United States-Mexico-Canada Agreement, a trade deal that replaced NAFTA to regulate trade and manufacturing across North America, especially impacting the auto industry.
"Yes, did Ontario in Canada lose manufacturing when NAFTA came into place? Of course it did."
NAFTA was an older trade agreement that helped the US, Canada, and Mexico work together to make and sell cars and other goods.
NAFTA, the North American Free Trade Agreement, was the previous trade deal between the US, Canada, and Mexico that facilitated cross-border manufacturing and trade before being replaced by USMCA.
"Look, we've talked about Fortress North America for, I don't know, five years now, keeping China at bay, doing it together with the Americans and the Mexicans."
Fortress North America means the US, Canada, and Mexico work together to make cars and parts in their own countries instead of relying on other countries like China.
Fortress North America is a concept aimed at protecting and strengthening the manufacturing and supply chains within the US, Canada, and Mexico. It seeks to reduce dependence on foreign countries, especially China, for critical automotive parts and vehicles.
"...Mexico, the United States forced Mexico to put an end to that construction of a plant down there by BYD."
BYD is a big car and battery company from China that makes electric cars. They want to build factories in other countries too.
BYD is a major Chinese automotive and battery manufacturer known for electric vehicles and battery technology. The company has been expanding globally, including attempts to build manufacturing plants outside China.
"...China tried to get into Mexico, the United States forced Mexico to put an end to that construction of a plant down there by BYD. They're going to try and force Canada to do the same if China wants to set up shop here..."
Car companies from China want to build factories in the US, Canada, and Mexico to make cars there. This is causing some arguments about jobs and trade.
Chinese automakers are increasingly trying to establish manufacturing plants in North America to produce vehicles locally. This has led to political and economic tensions, as countries like the US and Canada consider the impact on local jobs and trade policies.
""We have to remember the auto parts tariff. There's a big list that the administration came out with back in April, went into effect in May of last year, a list that's since grown of parts that are subject to the auto tariff. But if the part that you're bringing in isn't on that list, it's possible that you've been paying the reciprocal tariff instead.""
An auto parts tariff is like a tax on car parts that come from other countries. This tax can make those parts more expensive, which can affect how much it costs to build or fix cars.
An auto parts tariff is a tax imposed on imported automotive parts, often used to protect domestic manufacturers or as part of trade negotiations. These tariffs can affect the cost of vehicle production and repair by increasing the price of imported components.
"Yeah, and you describe in your story that the section 122 tariff is a bridge to something more permanent."
Section 122 tariff is a special rule that lets the government put temporary taxes on imports to fix trade problems for a short time.
The Section 122 tariff refers to a specific trade measure under U.S. law that allows temporary tariffs to address trade imbalances, often used as a short-term solution while longer-term policies are developed.
"the auto tariff end up being something that the Trump administration, again, sort of the prospect of raising the auto tariff... the US's struck deals with every other major importer of vehicles into the US to bring those rates, the auto tariff rate down from 25% to 15%"
An auto tariff is a tax that a country charges on cars brought in from other countries. This tax can make those cars more expensive for people to buy.
An auto tariff is a tax imposed on imported vehicles, which can affect the price and competitiveness of foreign cars in a domestic market. Changes in auto tariff rates can influence trade negotiations and the automotive industry's economics.
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Welcome to Daily Drive.
For Tuesday, February 24, 2026, I'm Kellan Walker in Las Vegas today on the show, Canadian
industry leaders warn against pivoting away from North American trade and toward China.
Lucid cuts its workforce as production ramps up and many of the Americas gets a new leader.
Plus, we break down everything you need to know about the U.S. Supreme Court tariff
ruling and what comes next for the auto industry.
It's just going to take time for the Trump administration to pursue the reciprocal tariffs
under this emergency powers law, in large part because they wanted to move quickly.
Let's run through all the news you need to know to keep up the auto industry.
Canada's auto industry must stay aligned with North America and not pivot toward China.
That's what industry insiders and experts said at the automotive news Canada Congress
in Toronto this month.
With 70-80% of Canadian production tied to the U.S. market, any shift away from continental
trade partners would be economically impractical.
That's according to Michael Robinette, vice president of Forecast Strategy at S&P Global
Mobility.
Rob Wildebore, executive chairman of Martin Rhea International, warned that pivoting toward
China risks strategic isolation.
He said, quote, if Canada is not consistent, I think you'll see Mexico and the U.S. make
a deal.
We'll have more on this story in a minute with automotive news Canada's Greg Lason.
Lucid is cutting hundreds of jobs, about 12% of its global workforce, as the EV maker
works to streamline operations and improve profit margins.
The automaker says the move will not affect hourly production workers at its Arizona plant.
Lucid produced about 18,000 vehicles last year, more than double in 2024, but it's
still wrestling with production challenges and rising costs that hammered the industry
in 2025.
And BMW Group is sending Sean Green to run many of the Americas starting May 1st.
Green is a 35-year company veteran who most recently led BMW Group China.
He replaces Mike Payton, who's leaving to pursue other opportunities after nearly seven
years in the role.
Many U.S. sales grew more than 9% last year to over 28,000 vehicles.
And those are today's headlines.
You can find more details on all those stories at AutoNews.com.
As we heard at the top of the show, Canadian auto industry leaders are warning the country's
leaders against breaking with the U.S. and Mexico and cozying up with China.
Our own Jake Nier spoke with Greg Laysen about it, Greg is the digital and mobile editor
of our sibling publication Automotive News Canada, host of the Automotive News Canada
podcast and he moderated the panel at Automotive News Canada Congress this month.
Jake caught up with him at his home office near Windsor, Ontario.
All right, Greg Laysen, as always, great to have you with us here on Daily Drive.
Good to be back.
Okay, so you were the moderator of this discussion with some really interesting industry insiders
and experts.
What surprised you the most about how these industry leaders framed Canada's position
heading into the USMCA negotiations?
You know, I don't know if I was really surprised.
It was a lot of the same in that we were a trusted partner with the United States in
Mexico that sort of the status quo has been working, that there's probably not a better
deal to be had other than removing the tariffs.
USMCA is by far the best thing to happen to the auto industry as a whole.
Yes, did Ontario in Canada lose manufacturing when NAFTA came into place?
Of course it did.
Everyone recognizes that fact, but you can't argue against the fact that it has built a
stable, trusted supply chain from essentially the borders of Ontario all the way down into
Mexico.
It has the way the automakers have worked it out, kept prices low for the consumer.
It's made money for the parts suppliers and it's made money for the automakers.
So I don't know if I was surprised by anything other than how much they really want to keep
USMCA in place.
And I think everyone, whether that's a Detroit three automaker or someone from overseas who
operates in one of the three countries wants to keep it.
They want to keep this in place and there has to be a way to get this done and accomplished
and continue this trusted, longstanding supply chain.
It's just too difficult to untangle at this point.
I am interested in getting into the China aspect of this all too.
What are the big concerns about?
For one thing, is it really a sort of one or the other kind of scenario?
Are we talking let's abandon the US and go with China or let's ignore China and stick
with the US?
Is it really that sort of black and white or is there room for nuance here?
There has to be room for nuance.
This is a very delicate dance that the Canadian federal government is engaged with right now.
Cozying up to China, luring Chinese manufacturing, opening our door to their imports.
Months before we're about to start USMCA renegotiations and reviews, that's a dangerous play because
you run the risk of upsetting Donald Trump.
Whether that's superficially or practically, he is going to be upset if we get closer to
China.
At the same time, everyone you speak to in the auto industry, whether they are in Canada,
Mexico or the United States says, look, China's coming.
So everyone wants to be first in line to land some sort of investment.
And now that in and of itself is another delicate dance.
How do we get the Chinese to manufacture here, but do it in a trusted manner?
Do it in a way that they hire people?
Do it in a way that they establish a supply chain that benefits not just Canada, but North
America as well.
So this is really a difficult position for the Canadian government to find itself in
as it heads to USMCA talks.
Look, we've talked about Fortress North America for, I don't know, five years now, keeping
China at bay, doing it together with the Americans and the Mexicans.
And now here, China tried to get into Mexico, the United States forced Mexico to put an
end to that construction of a plant down there by BYD.
They're going to try and force Canada to do the same if China wants to set up shop here.
This is a really difficult situation, but everyone agrees that the Chinese are coming,
that those vehicles will be sold in North America at some point.
And so then like any other auto investment, it becomes a dogfight.
So is Donald Trump really against Chinese automakers building in North America?
Or is Donald Trump against Chinese automakers building in Canada and Mexico and wants those
jobs for himself?
I've said it before, there's potential for an American assembly plant to use Canadian batteries
and minerals.
If it was an EV plant, there's an opportunity for a Canadian assembly plant to use American parts.
Look, the amount of parts being used in vehicle assembly in Canada from the United States,
those US parts, those numbers continue to rise.
So in fact, USMCA has been good here in auto industry.
So it's just really difficult to iron all this out, nail all this down and try and make it fair.
Okay, Greg.
So here's my kicker question.
And I kind of wish I was completely 100% joking about this.
Hockey, does hockey make this situation more volatile?
Or I mean, it seems like it seems like what became a friendly rivalry and a fun back and
forth that you and I and our co-workers were joking about over the weekend on our Slack channel,
into something that is turning pretty heated politically?
I would say a lot of things are heated politically in Canada.
We have Canadians that don't want a vacation in Florida.
We have Canadians upset that we lost our hockey game to the big bad Americans.
All of this you see on Donald Trump's Truth Social channel where he's posting memes and
videos and parodies and it's upsetting a lot of people.
It runs sort of parallel to the 51st state comments.
I just think a lot of people in general have thin skin around hockey, America,
Donald Trump, the 51st state comments right now.
I'll leave you with this.
Someone told me about 18 months ago now, take Donald Trump seriously, do not take him literally.
So if you can sort of wrap your head around that when he says, for example,
I'm not going to open the Gordy Howe Bridge to stick with the hockey analogy.
What he's saying is, I have a problem with our trade agreement.
I want to fix it.
This will get your attention.
Take him seriously.
Do not take him literally in most cases.
That's what I would say.
Greg Lason is digital and mobile editor of our sibling publication Automotive News Canada
and host of the Automotive News Canada podcast.
Greg, always a pleasure to have you on.
Always good to be here.
Coming up, our own John Irwin breaks down the Supreme Court tariff ruling
and explains what the Trump administration's next moves mean for the auto industry.
That's next on Daily Drive.
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Applications are now open for the 2026 Automotive News best dealerships to work for program.
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Welcome back to Daily Drive.
I'm Kellan Walker.
The Supreme Court struck down President Trump's reciprocal tariffs last week,
but the auto industry largely remains under the same duties as before.
Trump responded with a new 15% global tariff
and the administration is already working on a more permanent solution.
Our own John Irwin has been following every twist and turn of this story.
He joined our own Jake Neer to explain where things stand and what comes next.
John Irwin, as always, it's great to have you here on Daily Drive.
Great to be here.
So thought it would be a good time.
I know we've talked about the Supreme Court ruling already
and sort of the initial kind of reactions and meaning for the industry,
but today wanted to have a maybe even more forward looking kind of discussion
about what happens from now on,
especially because it seems like some of this is temporary.
But first, probably a good idea to level set anyway
and kind of start from the beginning.
Of course, the Supreme Court strikes down Trump's reciprocal tariffs last week,
but you report that auto industry duties largely remain in place.
Walk us again through what changed with this ruling and what stayed in place.
Yeah, I think it's important to note more than anything else that this ruling
from the Supreme Court doesn't impact auto tariffs or steel and aluminum tariffs.
Those were implemented under a different law, Section 232,
the Trade Expansion Act of 1962,
that's not the law that was being interpreted by the Supreme Court in this case.
What was affected was the, like you said, the reciprocal tariffs
that Trump put in place back in April on trading partners of the US.
They ended up ranging from 10% to 50%,
and also the fentanyl tariffs that Trump put in place in response to fentanyl trafficking
on goods from Canada, Mexico, and China.
It's important to note that the auto industry, auto imports,
whether it's vehicles, auto parts, and steel and aluminum
were exempted already from those reciprocal tariffs.
And for the most part, at least from those fentanyl tariffs,
with the exception of parts and vehicles that come from China,
those are the only ones that kind of stacked on top of the auto tariffs,
even after all the other exemptions were put into place.
Unless you were an importer of parts or vehicles from China,
in that sense, a lot of things didn't necessarily change for you.
But at the same time, the auto industry has paid over the past year or so,
billions of dollars in those reciprocal tariffs,
and in those fentanyl tariffs.
Like I said, some of that was vehicles and parts from China,
but also beyond that, there's importers of industrial robotics
and machinery for new factories, and also any parts that...
We have to remember the auto parts tariff.
There's a big list that the administration came out with back in April,
went into effect in May of last year,
a list that's since grown of parts that are subject to the auto tariff.
But if the part that you're bringing in isn't on that list,
it's possible that you've been paying the reciprocal tariff instead.
So now that that rate's gone, instead,
the Trump administration effective today, Tuesday, February 24th,
is implemented.
As of now, what is a 10% global tariff?
Trump has said they're going to raise it to 15% in the coming days,
but as of right now, it's 10%.
That effectively replaces the reciprocal tariff that was in place,
instead of it ranging from 10% to 50%.
It's a flat 15% global tariff that was implemented under,
again, a different law, section 122 of the Trade Act of 1974,
which basically allows the president to put into place a tariff of up to 15%
in response to trade imbalances, essentially.
It's important to note, though, that that is only a temporary 150-day tariff.
It goes away after that, unless Congress votes to extend.
There's a lot to pay attention to over the coming months,
we see how the Trump administration tries to essentially recreate,
as best it can, what it implemented last year,
but without the tools that the Supreme Court has since deemed unconstitutional.
Yeah, and you describe in your story that the section 122 tariff
is a bridge to something more permanent.
What's the Trump administration planning,
and what timeline are we looking at for those new duties?
Do we have any information about that yet?
Yeah, the administration has signaled it's going to launch
what are called Section 301 investigations.
The same law that it's using to put into place this 150-day temporary tariff
also allows the administration to launch investigations into unfair trade practices,
and at the end of those investigations, potentially issue a tariff in response.
The administration, the Trump in his first term actually,
used Section 301 to implement certain tariffs on the Chinese imports.
It looks like they're going to try to use Section 301, essentially,
try to recreate at least to a degree what it had with reciprocal tariffs.
That said, these investigations take months,
and we get to hear, as of taping at least,
any of these investigations actually being started yet.
And like I said, these things take months,
it can even take more than a year historically.
The Trump administration, we're looking at other investigations
that they've done in the second term and even in the first term.
They tend to try to move these things through as quickly as possible,
but there are things, statutory requirements, public hearings,
and chances for feedback from the public and from industry,
and things like that, that just require a lot of time.
I think the idea is that they're hoping that at the end of this 150 days,
they can have at least a lot of these new Section 301 tariffs in place.
But what that looks like, how quickly, if they're able to get to that point
within the next five months or so, kind of remains to be seen.
I would expect, we've seen ever since the liberation day back in April that
auto tariffs, anything subject to an auto tariff,
will remain exempt from anything new that's implemented.
That's sort of been something that the industry pushed for immediately,
back at the beginning of Trump's term,
and it's something that they've stuck with ever since.
I would imagine that'll be the case, but that's something that we'll just have to see.
I'm sure the industry will continue to push for that.
I know they were pushing for that when the Trump administration indicated
they were going to go with this new temporary tariff,
and they were able to secure that exemption here.
But yeah, that's the thing, it's just going to take time.
The Trump administration pursued reciprocal tariffs under this emergency powers law,
in large part because they wanted to move quickly.
They were able to, within just days of Trump announcing a tariff, implemented a tariff.
Turns out that emergency powers law, there's nothing in that law that explicitly says anything
about tariffs. It's historically been used for sanctions and embargoes and that sort of thing.
So all the other tools that Trump's disposal are either temporary in nature or require a lot
more time. And yeah, they kind of view this temporary tariff as essentially buying them
a little bit of time, sort of pick up the pieces.
And what's interesting to me is that with everything going on for the past year or so,
the strategy has been to slap down tariffs and then negotiate, right?
Like that's been Trump's playbook, basically.
And in the meantime, we've struck deals with the EU, Japan, South Korea, in the UK,
all to lower auto tariffs in exchange for investments.
How does this all affect those deals? What's going on with those?
Yeah, a lot of those are sort of, I think it's fair to say that, you know,
there's a little bit of uncertainty about what those deals end up looking like.
Do they end up into force long term?
Just because, like you said, it's sort of a carrot and stick thing in where the
administration was saying, hey, we have these reciprocal tariffs in place and auto tariffs
will lower both in exchange for investments and other concessions on trade.
And yeah, so the administration did lower, in most cases, except for the UK,
the auto tariff down to 15%, as well as the reciprocal tariffs down to that level.
But now that there are no reciprocal tariffs and there's just this temporary global tariff,
it's sort of up in the air, you know, are these deals still going to remain in effect?
How are they altered? What happens to them moving forward?
I know the European Union officials there sort of indicated
they're hitting the pause button while they're implementing the deal that they struck with the
US, just while they figure out what's happening here.
Now, to be clear, the auto tariff is still at 15% for anything coming in from the EU that hasn't
changed. That's something the Trump administration put into effect last year.
But, you know, if the EU hypothetically decides, you know, we want to renegotiate the terms of
this deal, just given the Supreme Court's decision, does that end up changing? Does the
auto tariff end up being something that the Trump administration, again, sort of the prospect of
raising the auto tariff, is that something that the Trump administration might use to
try to gain concessions? That still remains to be seen. It's sort of just something that's,
you know, been thrown out there. I think we'll find out more in the coming weeks and months
even, but seen some analysts, you know, basically said it's probably smart to think of those deals
as sort of being more or less on hold at the moment while everyone tries to figure out what
exactly is going on. But yeah, I think that's a big deal because other than Canada and Mexico,
the US's struck deals with every other major importer of vehicles into the US to bring those
rates, the auto tariff rate down from 25% to 15%. And while that's still significantly higher than
what the industry was dealing with before last year, a lot of people, you know, kind of viewed
that as a win that, you know, okay, 15% is a number. Yeah, it's very costly, but it's more
manageable in the long run than 25% would have been. And we'll have to see if this ends up impacting
them at all. But yeah, it's certainly something that I know negotiators on both sides of these
deals are looking at right now. And you mentioned that Canada and Mexico are the two that we haven't
reached a deal with, but we do have the USMCA review coming up. And you mentioned in your story that
this ruling from the Supreme Court sort of removes a major threat point for the administration
when it comes to those negotiations. So what are you going to be watching for in terms of how this
affects the USMCA situation? Yeah, analysts at TD Count brought this up. I thought it was a really
interesting point that, you know, as I mentioned up top, the Trump administration early last year
put in place these fentanyl tariffs on goods from Canada, Mexico and China. Now, like with the auto
tariffs, you know, there are exemptions for goods that cross the border that comply with the USMCA's
rules. But that was something that it appeared the Trump administration was going to sort of,
you know, again, kind of dangle in front of Canadian and Mexican negotiators say,
we have this tariff in place here, we can get rid of it, but we're looking for certain concessions.
But now the Supreme Court obviously has taken that tool away from the Trump administration. So
it sort of resets the dynamics of those upcoming negotiations, at least to a degree.
But yeah, that's going to be the big thing moving forward. Now that the Supreme Court decision has
been rendered, and we're going to see the kind of attention shift to a large degree to the USMCA
and its future. You know, as we talked about before, Trump has in the past sort of floated
the potential for a US withdrawal from the agreement, which is something that
automakers and suppliers, you know, very much in a united front have said, you know,
we don't want that, you know, we see that the need for a trilateral agreement between Canada,
the US and Mexico is vital to maintaining the industry's competitiveness globally in North
America. Whether Trump's serious about that is something that's, you know, should be taken
seriously or whether it's, you know, a negotiating ploy, you know, time will tell, obviously, but
it's certainly true that, you know, tensions have been, you know, pretty high, especially between
the US and Canada in recent months. So we'll have to see how those play out, you know,
obviously by July, the US, Canada and Mexico are supposed to lay out, you know, whether they want
to proceed with the USMCA or make changes to it. But, you know, it's possible that that process
could get extended well beyond July. If they decide we need to work through more things,
you know, it's possible that at that case, you know, things could extend beyond that deadline. So
I know that's a possibility that some in the industry are preparing for. And I just know that
a lot in the auto industry, you know, given the scale of the investments that we're talking about,
especially as we're, you know, trying to mitigate tariffs, the auto industry really
wants to have some sort of long-term certainty on what are the rules in North America that we're
going to be operating under as we make investments in the US or elsewhere in North America. You
know, it can take years to get a return on investment in these gigantic projects and, you
know, it might be over the course of the next 10 years, you know, to finally get that return that
you're looking for. So we need those rules now. And they'll want those, those rules in place as
soon as possible. But it looks like it might be kind of a dragged out somewhat contentious process.
And we'll see what happens. John Irwin is our in-house expert reporter for Automotive News,
covering tariffs and trade, and also GM for us here at Automotive News. John, thank you so much
for joining us again. And thanks for all of your coverage on this. Hope people will go to autonews.com
and see your great writing on the subject. Thanks so much. That's Daily Drive for today.
I'm Kellyn Walker. Thanks to our own Jack Wallsworth for his reporting for today's podcast.
We also have reporting from Grace Macaluso and Greg Lason of our sibling publication,
Automotive News Canada. You can get the latest news on tariffs, trade policy,
Canadian manufacturing and everything happening in the auto industry at autonews.com. We'd love
to hear from you. Let us know as you think of the show and the topics we covered today.
Send us an email at dailydrive at autonews.com or leave us a voicemail at 313-444-2774.
And if you enjoyed the podcast, remember to like, leave a review and subscribe so you never miss an episode.
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