America's recently revised regulations expose a weakness that Canada could leverage in the ongoing tariff war

First a (brief) overview of what the new rules mean. Since 1978 — post OPEC oil crisis — U.S. Corporate Average Fuel Economy, or CAFE, requirements have forced automakers to produce more fuel-efficient vehicles. And, as I said, under the Biden Administration, those CAFE standards were expected to eventually reach a fleet average of 50.4 mpg by 2031.

That, despite all the hype about cost savings, is not Trump’s real issue with CAFE. What truly galled the President was that experts calculated there was no way manufacturers could reach their fleet fuel-efficiency targets under the Biden rules without converting a significant portion of their fleet to battery power — perhaps as much as 60% of their products in some cases. Current Transportation Secretary Sean Duffy even characterized the regulations as an “illegal [EV] mandate.”

Under Trump’s latest rules, on the other hand, most marques won’t have to produce more battery-electrics than they do now. Considering that U.S. BEV sales currently hover below the 6% mark, there’s little wonder that automakers, especially the Detroit Three, are rejoicing.

All that said, the actual mechanics of CAFE rules are much more complicated. First of all, CAFE doesn’t treat all automakers equally. While, under the Biden plan, the overall average of the entire industry was to be US 50.4 mpg, individual automakers had different targets based on the mix of vehicles they produced. Basically, it was the National Highway Traffic Safety Administration’s way of reaching the final target while accounting for how many passenger cars versus light-duty trucks each automaker produced. The Trump regs will follow the same structure, the major difference being that the overall fleet average will now be 34.9 US mpg by 2031. Nonetheless, each automaker will have a different target based on the actual composition of its fleet.

The second snag is that although America’s corporate fleet fuel economy is almost always portrayed as a single homogeneous number — again, 50.4 mpg under Biden; now 34.9 mpg — since 2010, there have been different standards for “passenger cars” and “light trucks.” This is based on a “footprint” calculation — basically a rectangle defined by the contact point of the four tires — that allows larger vehicles to consume more gas while remaining compliant.

For instance, while under the Biden curve passenger cars — basically sedans and crossovers — would have needed to average 53 or so miles per gallon for 2026, the new Trump rules only require them to reach 35 US mpg. The difference for pickup trucks is even more stark: under Biden, light-duty trucks (basically Ford-F-150-sized and smaller) would have had to average 42 US mpg in 2026, while Trump’s new rules require about 30 miles per gallon.

As Motor Mouth has detailed many times, the Detroit Three — Ford, General Motors, and Stellantis — are extremely vulnerable to the loss of truck sales in Canada. Ford imports some 130,000 F-Series from the United States into our country. And, between the three automakers, they sell almost 300,000 full-sized pickups here in the Great White Frozen North, making us the only significant export market in the world for their most profitable products. In total, Canada accounts for roughly 15% of the Detroit Three’s sales of full-sized trucks.

Now, some of you may remember back in February — and, yes, Trump’s trade war has caused us to forget otherwise important policy developments — Prime Minister Carney announced that he was rescinding the Trudeau-era EV mandate (officially known as the Electric Vehicle Availability Standard or EVAS) and announced it would be replaced with a restriction on CO2 emissions. If you’ve forgotten, I’ll remind you he was calling for current tailpipe emissions of 172 grams of CO2 per mile to be reduced to 74 gm/mi in 2035, by which time the government predicted that 75% of all the vehicles sold in Canada would have to be battery-powered BEVs.

Now, Motor Mouth argued that said EV penetration might actually turn out to be closer to 60%, but, exact percentages aside, such greenhouse-gas restrictions would have forced the majority of our vehicles to be fully electric in fairly short order. In fact, I think I called it a “quasi-mandate.”

Trump’s fumbling of environmental policy could offer Prime Minister Carney yet another bargaining chip in the trade war that’s engulfed our auto industry

That’s a huge problem for the D3. I won’t trouble you with conversions from miles per gallon into equivalent amounts of CO2, or detail how every automaker will be affected by such stringent regulation of tailpipe emission. I will, however, note that a GMC Sierra 6.2-litre 4WD pumps out 548 grams of CO2 every mile; a Ford F-150 with a 5.0-litre V8 emits 484 gm/mi; and even Ram’s hybrid e-Torque 1500 spews out 470 gm/mi.

No matter how you manipulate those numbers, there’s no way that any of the Detroit Three could meet Canada’s proposed GHG limits while building full-sized trucks to Trump’s new standards. They’d have to restrict ICE-powered truck sales or build more of their terribly unpopular electric trucks especially for Canada (and that’s assuming Canadians would buy them). Hybridization would not provide the greenhouse-gas reduction required, nor would electrifying smaller pickups — like Ford’s proposed Fathom — do the trick. Just for a little more context, the GHG rules that Carney proposed last year are stricter than the Biden CAFE rules that automakers just convinced Trump they couldn’t attain.

The Carney government has not progressed very far with these proposed GHG emissions regulations. In fact, because the EVAS mandate has been cancelled without officially being replaced, Canada’s tailpipe emissions regulations are in limbo, which leaves Carney a perfect opportunity to take advantage of America’s backsliding.

The first step would be to release a “public consultation” on the current proposal for GHG reduction and promote it with much fanfare, detailing its year-over-year CO2 targets and the tonnes of emissions it would reduce. The point, of course, would be to force the Americans back to the negotiating table.

The second iteration, kept closer to the chest, would be the regulations Canada would accept if granted a commensurate reduction in Trump’s proposed tariffs. Though it would be a be very thin needle to thread, we’d have to come up with a GHG standards liberal enough to allow the Detroit Three to slide through largely unobstructed while, at the same time, restrictive enough to placate the Liberal Party’s environmental caucus — which is, judging by recent headlines, already up in arms over Carney’s cancellation of the EV mandate.

With just the right balance between electrified and ICE power, for instance, sales of Ford’s Maverick Hybrid and the much-hyped all-electric Fathom might just let the F-150 squeak by the GHG limits relatively untethered.

Motor Mouth has long contended that the Detroit Three’s reliance on Canadian pickup sales is a major bargaining chip in our auto-trade talks with the U.S. They are Germany’s weak southern flank in the Battle of the Bulge, Chicago’s lack of a dominant centre in the Jordan years, and McEnroe’s inability to return Borg’s serves off his backhand. We should, as Motor Mouth has long suggested, tariff them as we do all other vehicles imported from the United States.

And, if the Prime Minister is at all serious about saving the auto industry — which, it’s becoming evident, he seems increasingly less interested in doing — he should take advantage of this latest Trump misstep and use our proposed CO2 regulation to expose that weakness for one and all to see. Simply put, what threatens F-150, Silverado, Sierra, or Ram threatens American auto-making.

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