Auto part retailers in N.L. have been preparing for Trump's tariffs, but worry about lasting impacts

While the Ontario auto sector might be the target of punishing U.S. tariffs, ripple effects are being felt in the auto parts retail world in Newfoundland and Labrador.

Last week, U.S. tariffs on Canada's auto sector industry came into effect, prompting plant shutdowns and layoffs. In response, Canada rolled out 25 per cent tariffs on non-Canada-United States-Mexico Agreement (CUSMA) compliant fully assembled vehicles that are imported from the U.S.

Douglas Squires, president and CEO of Newfoundland-based Colonial Auto Parts, says the tariffs go beyond targeting just Canada as most auto products are made in other parts of the world, sent to the U.S. and then shipped to Canada.

Squires says he's been preparing for months for what a second Trump presidency might mean for his family business. Once Trump was elected, Squires says his company began looking for suppliers outside of the U.S. in order to "de-Americanize" where he sources his parts.

However, some items can't be sourced outside of the U.S., like paint, exhaust and mufflers.

"Other than that, most other products can be sourced directly into Canada from the manufacturers, which is what we've been working on for, I guess, since the beginning of December," Squires told CBC Radio's The St. John's Morning Show.

Taking measures

U.S. tariffs on auto parts coming from China will have a big impact on the price of imported goods sold in Canada, says Squires, adding that he's already seen prices increase from six to 22 per cent.

Squires says he has been stocking up on some parts for months, ahead of any price increases.

"If you buy in sufficient quantities, you can get direct shipments to your place of business rather than having to buy it from, say a middleman, or a warehouse in either the United States or Canada," he said.

But that means bigger orders that are being housed longer.

Other than COVID-19 factory shutdowns, he says his company has never seen anything of this magnitude.

"We're a family owned and family operated private business. So obviously, you know, it's very concerning because of the fact that we have our livelihood invested into it," he said.

It's a similar story for Allan Brown, who owns McCormack's Service Centre and Towing in Gander. He says he's anticipating a change in pricing and availability over the next few months. 

Brown told CBC News that automotive tariffs top the effects that even the cod moratorium had on the industry.

"I think this is going to be a challenge," he said. "Vehicle prices are already higher. They're a lot higher than they were pre-COVID, and that includes reused vehicles."

With that in mind, Brown is recommending that his customers put work into their current vehicles instead of buying a new one for the time being, even if the parts might be 25 per cent more expensive in most cases. 

Brown, like Squires in St. John's, has been looking for alternative sources for parts where possible. He keeps an inventory and has local suppliers, but the Gander shop owner says he's expecting that resource to slow down at some point.

He expects people in the industry to purchase Canadian — when they can —  even if the tariffs are relaxed or removed. 

"I've got a feeling most people are so disappointed and so disheartened by the way that we've been treated and portrayed, that this will continue, I think, long after the tariffs are here and gone," Brown said.

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