On January 16th, reports emerged indicating that the Canadian automotive sector underwent a substantial contraction in November. This downturn was attributed to a combination of factors: the global chip shortage, sluggish demand, and the looming pressure of the U.S. trade war. This contraction had a ripple effect, pulling down overall commodity activity. As per a Thursday report released by Statistics Canada, manufacturing sales took a hit, dropping by 1.2%, while wholesale revenues witnessed a steeper decline of 1.8% during the same period. Both figures fell short of analysts' expectations. Prior to this, economists had anticipated a 1.1% decrease in factory sales and a modest 0.1% uptick in wholesale trade. The motor vehicle sector bore the brunt of this downturn, with manufacturing sales plummeting by a staggering 15.9% in November. This marked the second consecutive month of decline and reached a new nadir since October 2022. Statistics Canada highlighted that the global semiconductor shortage severely disrupted vehicle production at a key assembly plant. This disruption compounded the challenges posed by weak demand and trade barriers. The data underscores that the Canadian economy is grappling with the repercussions of U.S. tariff policies. Moreover, the weakening momentum hints at a potential slowdown in growth for the fourth quarter.