TARIFF TALK TAKING TOLL
Local auto jobs put at risk
North American auto companies have already advised Ottawa on the brewing trade war — now they ’ll do the same for Washington. After suggesting what Canada should do about new American tariffs on imported steel and aluminum, those same companies have until Friday to advise the United States about President Donald Trump’s threat to impose tariffs on imported vehicles and auto parts.
“Trade wars generally don’t work,” said Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association. “Our main message is, we’ve got to get back to the table — we highly encourage them to find a way through this.” One in five Canadian manufacturing jobs would be at risk with new tariffs in the automotive sector, according to a TD Economics analysis released Monday. Ontario would feel the most pain, given it has the highest concentration of those jobs, while the Canadian economy would suffer “permanent scarring,” said TD senior economist Brian DePratto.
Last week, a Scotiabank report said the auto tariffs would have a much more substantial impact than the steel and aluminum tariffs now in place, including putting all three North American national economies into recession. “We’re certainly concerned and monitoring this closely,” said Windsor Essex Economic Development Corp. CEO Stephen MacKenzie.
The uncertainty created by the current tariff and NAFTA threats is already having a negative impact on Windsor’s economy.
“We have definitely seen a slowdown locally by businesses — the uncertainty has caused them to pause with their (investment) decisions,” said MacKenzie. Referring to “tariffs and costs” last January while talking to the CBC at the Detroit Auto Show, FCA chief executive officer Sergio Marchionne said, “if we can’t recover the costs of the vehicle, that would be lethal, I think, for Windsor.” “Oh, my gosh, 6,000 people work there — I don’t even want to think about that,” said MacKenzie, describing it as a worst-case scenario.
A spokeswoman for FCA Canada said Tuesday the company won’t comment on the trade and tariff talks and referred media queries to Nantais and his organization, whose members are FCA, General Motors and Ford.
“I wouldn’t say Windsor is really exposed — everybody is potentially exposed,” said Nantais, adding every company and vehicle being manufactured would be affected differently by any new tariffs based on a number of criteria. In the meantime, he added, it’s all mere speculation.
“We really don’t know what’s going to happen,” Dino Chiodo, national auto director for Unifor, said in shrugging off the TD report. He said the U.S. has a valid point about its low tariffs for auto imports and the high tariffs imposed on vehicle exports from North America, but “we need something more constructive than Trump’s shoot ’em up approach.”
Nantais, MacKenzie and others are hoping cooler minds prevail and that the new auto tariff threats
is merely posturing for the NAFTA talks.
Nantais said he believes the negotiators are “very close” to reaching a deal.
“We have to be very careful here not to get caught up in the emotion of it and the rhetoric ... to avoid the things that would not be helpful to our economy — and the American economy,” said Nantais. “NAFTA has been a great success for all three countries — that’s why it’s so important to get this agreement.”
Five of every six vehicles manufactured at FCA Canada’s Windsor Assembly Plant are shipped to the U.S., but Chiodo points out that half of all vehicles sold in Canada are imported from the U.S.
Our main message is, we’ve got to get back to the table — we highly encourage them to find a way through this.