Region’s manufacturing, automotive sectors facing ‘choppy waters’ amid tariffs
Posted Mar 6, 2025 03:57:00 PM.
Last Updated Mar 6, 2025 03:59:34 PM.
The Region of Waterloo’s economy, and history, are tied to the manufacturing and automotive industries, the U.S. tariffs are trying to harm.
It forces many businesses in the area to take action and limit impacts. It creates uncertainty for employees and the subindustries that will be hurt collaterally.
Tony Lamantia, President and CEO of the Waterloo Economic Development Corporation, told The Mike Farwell Show, businesses are taking a page from the ‘COVID-19 reaction playbook’ and working together to mitigate the effects of the tariffs.
“We’re facing choppy waters. You’re talking about one in five jobs that are trade exposed, because we have these great manufacturing jobs in the region,” he said. “It doesn’t mean they’re all at risk, it just means that they are threatened by the cloud of tariffs, so there’s a range of responses that companies are working on, but it’s definitely elbows up.”
More on the trade war
Lamantia said that between 55,000 to 60,000 jobs are “trade exposed,” meaning they would be deeply impacted if the tariffs continue for a long period of time. Toyota told CityNews Kitchener it employs about 9,700 people at its plant.
The situation is “highly fluid,” a Toyota spokesperson said, “we have no plans to change our production within the foreseeable future. Our vehicles are in high demand, and we will continue to build to plan.”
Things are changing daily, as President Donald Trump pauses, implements and then exempts certain terms in the tariffs.
On Tuesday, a full set of 25 per cent tariffs came into effect on Canada and Mexico from the U.S., followed by the exemption of fees on the three big automakers — Stellantis, Ford and General Motors — the next day. Now Thursday, Trump has said that Canada and Mexico will get a one-month pause on tariffs for some imports.
Trump made the decision to pause levies on Mexican imports compliant with the Canada-U.S.-Mexico Agreement until April 2 on Thursday morning, but amended the tariffs order to cover Canada as well, according to Reuters.
This sort of chaotic up and down is not helping business, Lamantia explained.
“Uncertainty does not help the investment environment. You’re not going to be making a long-term commitment or any significant capital investments unless you have some visibility on the future,” he said.
However, what the trade war has done is create a strong sense of Canada’s sovereignty and patriotism, and also opened up discussions on interprovincial trade red tape.
“This is an opportunity for us to finally get our act together on interprovincial trade barrier removal,” Lamantia said. “I’m talking about free flow of goods, services, people across the country, (that is) long overdue.”
One of those actions taking place is that the prime ministers and premiers are on the same page with allowing certified professionals to work anywhere in Canada.
Another step to reducing the strain on the economy would be to continue diversifying trade partners and creating financial supports for businesses, Lamantia explained.
This is needed particularly in Waterloo Region because of how vulnerable the area is to the tariffs.
A report from the Canadian Chamber of Commerce shows that Waterloo Region could be one of the most heavily impacted areas throughout Canada.
It details the state of vulnerability for the top 41 cities across the country, listing Kitchener, Cambridge and Waterloo, as the fourth highest. Much of the reason is due to its heavy involvement in the manufacturing sector.
Last year alone, Waterloo Region accounted for $18 billion in manufacturing exports to the U.S. This accounts for upwards of 92 per cent of the region’s total exports.
Lamantia says he is “fairly calm” because of the ever-changing landscape, and notes that in the past Trump has given more exemptions.
In the meantime, businesses are working on mitigation plans, cost impacts and considering debts and the company’s value in the supply chains.
“I think we’re going to see a resolution here,” he said. “In the meantime, you have to have a plan, right? Failure to plan is a plan to fail. Because if Donald Trump really wants mutually assured destruction of manufacturing jobs, then you know, all bets are off.”
