The damage from U.S. President Donald Trump’s trade war is spreading.
Up to 12,000 workers in the Canadian automotive parts industry are off the job thanks to the temporary closure of Stellantis assembly plants in Windsor and Warren, Mich., a top industry insider has estimated.
“Anyone who supplies Windsor and Warren isn’t working right now,” said Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association. “There are probably 10,000 to 12,000 people who aren’t working because of this.”
The layoffs have come at plants owned by Canadian parts companies on both sides of the border, said Volpe.
That number, stressed Volpe, is on top of the 4,500 workers at the Windsor assembly plant who are off the job for at least two weeks beginning Monday.
Stellantis announced last week that it was pausing production at assembly plants in Windsor and Warren, as well as in Mexico, citing the impact of Trump’s automotive tariffs. Trump has said repeatedly that the tariffs are meant to lure manufacturing jobs back to the U.S.
A 25 per cent tariff on cars and light trucks imported to the U.S. went into effect at 12:01 a.m. last Thursday.
American officials have said there will be a partial exemption for cars made with parts from the U.S., although it’s still not entirely clear how that will work.
Liberal Leader Mark Carney has said Canada will retaliate in kind, with a 25 per cent tariff on American-made cars imported to Canada.
Cars with less than 75 per cent North American content will get hit with the full 25 per cent tariff by Canada. Cars with at least 75 per cent North American content — making them CUSMA-compliant — will only face the tariff on content not coming from Canada or Mexico.
Stellantis shares plunged 5.6 per cent in trading Monday.
Other automakers and parts manufacturers also saw share prices drop. In New York trading, Ford fell 3.6 per cent, GM fell 1.5 per cent, while Tesla shares were off 2.6 per cent.
Wedbush Securities analyst Daniel Ives slashed his price forecast for Tesla shares by more than 40 per cent, saying Trump’s auto tariffs and CEO Elon Musk’s role in Trump’s administration were both hammering the company.
“The economic tariff Armageddon unleashed by the Trump Administration,” Ives wrote, “is a double whammy for Tesla in our view.”
The share price fallout also extended to automotive parts manufacturers. Aurora-based Magna saw its shares fall 2.8 per cent, while Guelph-based Linamar dropped 2.6 per cent and Vaughan-based Martinrea fell almost three per cent.
Volpe and auto industry analysts have been predicting for months that Trump’s tariffs could lead to the entire North American auto sector shutting down within weeks, given how highly integrated its supply chain is.
In a report last week, S&P Global Mobility automotive analyst Stephanie Brinley suggested that some level of tariffs are here to stay, and that they will disrupt the industry, and jack the cost of vehicles by thousands.
They’re also unlikely, said Brinley, to bring manufacturing jobs back overnight.
“There is no quick solution, and increasing manufacturing in the U.S., particularly based on an artificial economic condition, will be costly and is likely to create a more expensive manufacturing environment,” Brinley wrote. “Retaliatory actions are just beginning to surface; those actions will add another layer of complexity to the situation.”
