Business groups and union leaders across Canada blasted U.S. President Donald Trump’s trade war Tuesday, calling it “self-defeating,” “shocking” and an “economic call to arms.”
Trump’s decision to go ahead with 25 per cent tariffs on all imports from Canada and Mexico — which kicked in Tuesday at 12:01 a.m., is a return to the 1800s, said Candace Laing, CEO of the Canadian Chamber of Commerce.
“The U.S. government’s self-defeating tariff policy disregards decades of success and trillions in trade to try and revive a failed economic model from the 1800s,” said Laing in a written statement. “The U.S. can claim this policy is about hitting Canada where it hurts, but it will soon see the disastrous impacts at home in cities like Detroit, Buffalo, Pittsburgh and Louisville.”
The tariffs will be a disaster for the highly integrated North American automotive industry, warned Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association.
“This will undo over 60 years of integration that has fostered a globally competitive automotive industrial base,” said Kingston, whose association represents the Big Three Detroit-based automakers, GM, Ford and Stellantis. “Given the importance of the automotive industry to the U.S., Canada and Mexico, the tariffs will have negative economic consequences. We are calling for an immediate lifting of the tariffs.”
Auto assembly plants and parts manufacturers across the continent will likely shut down within a week, said the head of the Automotive Parts Manufacturers’ Association.
“Everybody is very anxious, waiting for the moment when their customers are going to say ‘stop shipping,’ ” said APMA president Flavio Volpe.
While tariffs are usually paid by the importer of record, automakers have been asking some parts makers to put up a deposit for the amount of the tariffs, something that would wipe out their profits, said Volpe.
“If you have a five per cent profit margin and you’re paying 25 per cent, you are wiping out this week’s production margin in today’s shipments,” said Volpe. “Tomorrow will be two weeks. By the end of the week, it will be five weeks’ worth of profit wiped out by a surtax that didn’t exist last week.”
In an interview, Unifor national president Lana Payne said the tariffs will almost certainly cause the worst industrial disruption this country has ever seen, including the global COVID-19 pandemic.
“For COVID, we knew it was a supply-chain problem. We couldn’t get bolts, so it meant engines couldn’t get built. But eventually we got the bolts,” said Payne.
While plant shutdowns haven’t started, make no mistake, said Payne — they’re coming.
“It hasn’t happened yet, but it’s going to, this is going to happen,” said Payne. “If we’re talking about the auto industry specifically, you know, some of these companies will not be able to operate, particularly in the parts sector.”
And, said Payne, hurting Canadian workers and companies is Trump’s biggest goal.
“It was never about borders. It was never about drugs. And I hope people understand this right now. It was always about coming after Canadian jobs and Canadian production,” said Payne. “Today our trade relationship forever changed with the U.S. and now we must invest in ourselves, redefine international trade relationships, and build a new, more resilient economy.”
Shares of all three automakers took a pounding on the stock market Tuesday. By the time trading closed, Stellantis shares were down more than 10 per cent, Ford shares were down almost three per cent and GM was down 4.6 per cent.
In Toronto, the S&P TSX Composite Index was down 429.57 points to 24,572, a drop of 1.72 per cent, wiping out more than $68 billion in stock value.
Canadian automotive parts manufacturers also saw their share prices tumble. Aurora-based Magna International fell by 3.6 per cent, while Guelph-based Linamar dropped 4.5 per cent.
The head of the Canadian Steel Producers Association (CSPA) said Tuesday’s tariffs, along with another round of 25 per cent tariffs set to hit steel and aluminum imports next week, will hurt workers and consumers on both sides of the border.
“Combined, these tariffs would put Canadian steel at a 50 per cent tariff rate when entering the United States, which is a comparable tariff level to some of the worst global steel trade offenders such as China. It is completely shocking for the United States to treat a long-time and fair trading partner in this manner,” said CSPA president Catherine Cobden.
