Tariff threats tormenting auto industries on both sides of the border

With the stock market reeling and business leaders clamoring for some stability, U.S. President Donald Trump has announced a doubling of retaliatory tariffs on Canadian steel and aluminum, a move intended to target the Canadian auto industry.

Waterloo Region was recently listed as the fourth most vulnerable municipality in the country to rising tariffs.

But, industry insiders say when you attack auto manufacturing in Canada, you attack U.S. industry as well.

David Adams, president, CEO, Global Automakers of Canada, while a guest on The Mike Farwell Show, said the two nations’ auto industries are intertwined for a very good reason.

“The industry has been integrated for some manufacturers since the mid-1960s, for others since the mid-1980s. The point of doing that was to take advantage of economies of scale to be able to build vehicles in the most effective and economic way.”

Adams said given the interconnectivity, what the Trump administration is doing is bizarre.

“What effectively happens here is that the U.S. is tariffing their own parts and components manufacturers because those parts come into Canadian vehicles which are then going to be, potentially, tariffed by the United States so it really doesn’t make any sense.”

He went on to say that he hopes in the end cooler heads will prevail.

“Everybody is hoping that these are short term tariffs, if they get put in place, and that the tariffs are actually potentially a tool by the U.S. administration to potentially bring the parties back to the table (to renegotiate a free trade agreement).”

When on March 4 the first round of 25 per cent tariffs on Canadian goods entering the U.S. came into effect, Adams released a statement. In it he said, “Tariffs are taxes that hurt consumers with increased costs, drive inflation, and unfairly impact workers on both sides of the border.”

The release goes on to say, “These tariffs must be removed as quickly as possible if we are to avoid permanent and significant damage to the North American automotive sector.”