Tariffs, trade friction and Chinese EVs: NADA economist Patrick Manzi on North America’s vehicle market outlook
Patrick Manzi, chief economist at NADA, explains how tariffs, shifting trade policy and rising Chinese EV competition are reshaping vehicle sales, production and cross-border supply chains.
At Finished Vehicle Logistics North America 2026, Patrick Manzi, chief economist for the National Automobile Dealers Association (NADA) sits down on the Red Sofa with Megan Kelly, deputy editor, Automotive Logistics to discuss the forecast for North America's vehicle sales and production shifts and what they mean for vehicle logistics.
Tariffs continue to disrupt deeply integrated supply chains
Manzi expects North American vehicle sales to decline slightly year-on-year, following modest growth in the previous period. Tariffs on imported vehicles and parts are now feeding through into vehicle pricing, adding cost pressures across the industry and weighing on demand. Parts can cross borders multiple times before final assembly, meaning tariffs are applied repeatedly, compounding costs at each stage. This raises concerns about efficiency and investment, particularly if future policy shifts disrupt the free movement of goods across the region.
USMCA review: The case for a strong trilateral agreement
With the USMCA trade agreement up for review this summer, Manzi stresses the importance of maintaining a robust trilateral trade framework across North America. Fragmented bilateral agreements, he warns, risk undermining the efficiency of existing production networks, which have been optimised over decades to minimise cost and maximise scale. A stable, integrated trade environment remains critical for both manufacturers and logistics providers.
Chinese OEMs and EV competition on the horizon
BYD and other Chinese automakers are already gaining visibility in North American border regions and neighbouring markets. Despite high tariffs and regulatory barriers, competitively priced battery electric vehicles (BEVs) could still gain traction.
Manzi suggests growing consumer awareness, driven by social media and cross-border exposure, could increase demand in the US market over time.
While US dealers currently support protective tariffs to allow domestic OEMs to catch up, Manzi notes a potential shift in sentiment. If and when Chinese OEMs enter the US market at scale, dealers are likely to move quickly to secure franchises and participate in the new competitive landscape.
