Auto Industry Remains The Last Sticking Point In US-Canada Trade Negotiations

Good morning! It's Wednesday, August 19, 2026, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, a Canada-U.S. trade deal is apparently close but cars remain the last sticking point, Samsung raises prices on computer chips to meet surging demands, California dealers have a bevy of new rules to deal with, and China's Pony.ai wants to bring self-driving cars overseas. 

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Oh, Canada, our former favorite friend. Hopefully we can be close again someday soon, but until then, we've got to hammer out another trade deal after the current president, who negotiated the last trade deal last time he was president, decided it wasn't a good deal after all. President Trump threatened Canada with a whole host of new tariffs after kicking off a fit over the opening of the Gordie Howe bridge. You know, the brand new expanse that will benefit both of our countries, and that was paid for entirely by Canada? Apparently a free bridge wasn't a good enough deal. 

Anyway, we raised tariffs on Canadian goods by 50% because Canada had the temerity to spend years building much-needed and significant infrastructure between our two nations. Canadian Prime Minister Mark Carney and Trump have been hammering out the details, but one sore spot remains: the auto industry. From Automotive News: 

Trump put a 25 percent tariff on foreign cars and trucks last year but offered Canada and Mexico a partial break based on U.S. parts in the supply chain. A vehicle assembled in Ontario with half U.S. content would have an effective tariff rate of 12.5 percent, for example.

Canada has pushed to reduce the headline tariff rate on autos to 10 percent or expand the exemption, according to people with knowledge of the discussions who spoke on condition of anonymity. But the Trump administration has held firm to a minimum 15 percent rate, the people said.

U.S. Trade Representative Jamieson Greer has demanded Canada drop all of its trade retaliation measures — including the counter-tariffs it placed on U.S. vehicles last year and provincial bans on the retail sale of American-made alcoholic drinks.

The new tariffs were supposed to begin overnight, but Trump extended the deadline by three days, according to CNBC. Trump proclaimed on TruthSocial that the U.S. and Canada have reached a deal, which has yet to be finalized. Whether or not that is true is anyone's guess, but as recently as Monday Carney told reporters his country is preparing for "all eventualities" should the talks fall through. Ontario Premier Doug Ford seems to be a sore spot, as all of Canada's car factories are in the province. Ford has refused to reverse the ban on U.S. alcohol until the U.S. moves on tariffs. Which is a shame because after all of this, I bet both sides could use a drink. 

AI is ruining the internet and somehow both the oldest and youngest generations' minds, but that's not all. The large language models are eating up chips too. No, not Cool Ranch Doritos, computer chips. Chip maker Samsung is raising its prices for some customers 10% to 15%, after having been running its factory at full tilt since last year to meet demand. The price hike is a sign that those efforts are in vain. From Reuters: 

Demand from Chinese customers has been particularly strong, but Samsung has been unable to meet all orders because it must serve U.S. customers and reserve part of its capacity to support its own chip production, said the sources, who spoke on the condition of anonymity because they are discussing sensitive commercial matters.

Chinese customers are among ​those accepting the steepest price increase, one of the sources said, underscoring how U.S. curbs on exports of advanced chipmaking equipment to China have ​increased local firms' reliance on overseas foundries.

While China and Taiwan are currently bearing the brunt of this price hike, it's still not exactly a good sign for the global market. A rising tide lifts all boats, and all that. Should these price hikes hit U.S. buyers, the tickle down into car prices could cause already astronomical MSRPs to spike even further. Hey, did you know car prices are a major driver of inflation? Just a little fun fact for you. 

California car dealers are facing changes on how they do business from advertising to how long they have to keep compliance records, and they have less than two months to get their acts together. The changes are coming as part of the California Combating Auto Retail Scams Act. The CARS Act (see what they did there?) is meant to crack down on shady car dealership practices, according to Automotive News:

The California Combating Auto Retail Scams — or CARS — Act takes effect Oct. 1. The law requires dealers to communicate a vehicle's total price in advertisements and their first written communication with a customer, and adds disclosures for financed, leased and cash transactions. It also restricts certain add-on products and establishes a three-day return right for qualifying used vehicles.

[...]

Under the law, customers may return an eligible used vehicle within three business days. Dealers may charge a restocking fee equal to 1.5 percent of the vehicle price, with a $200 minimum and $600 maximum. The vehicle can be driven up to 400 miles, but dealers may assess $1 per mile above 250 miles, capped at $150.

If these sound like good rules that we should have in all states I have some bad news for you; the feds tried to implement its own CARS Act but the National Automobile Dealers Association and Texas Automobile Dealers Association managed to murder the act in court. Thanks guys! California dealers, for their part, say they're already complying with many of the new statues and don't consider these updates standards a big ask. Imagine that. 

Robotaxi companies continue to grow their footprints here in the U.S. (while still making no money) but China's Pony.ai has dreams of world domination. While 4,000 robotaxis deployed outside of its home market may seem like small potatoes, small potatoes have a way of growing even more potatoes when seeded into fertile soil. From Reuters: 

Pony.ai, which is targeting ​a robotaxi fleet of 3,500 vehicles by year-end, did not provide ⁠a timeline for when all the planned overseas deployments would be finalised. It ​also did not say how many robotaxis it has deployed overseas so far.Last week, ​it made public plans to deploy more than 2,000 robotaxis in Europe through an expanded partnership with Uber (UBER.N)

The more than 4,000 vehicles in Pony.ai's overseas deployment pipeline have already been contracted, with rollout ​timelines dependent on permits and other regulatory and operational requirements, CEO James Peng ​said on a post-earnings call.

While American self-driving outfits like Waymo and Tesla have yet to turn a profit on their robotaxis Pony.ai's revenue from robotaxis surged to a third of the company's income, some 691.2%. It still only operating a few thousand vehicles in China, including robotrucks, but that's a hell of a head start. 

The Indianapolis Motor Speedway remains the height of Americana in the Midwest to this day. The people watching can not be beat.

Oh friends. Gas prices continue to inch up once again. Your average price for a gallon of regular degular gas-o-lean is up by two cents overnight, even though WTI Crude Oil futures and Brent Crude are still basically in the same place they were yesterday at $85 and $91, respectively. Yesterday was the highest average national price for a gallon of gas in the month of August ever, which makes today yet another record-breaker.

I just got a new pair of hi-fi noise canceling headphones and it's like I'm hearing all my favorite tunes for the first time. This is a particularly crispy summertime tune for your a.m. jam session.