New tariffs could be devastating for Windsor, auto industry leader says

The president and CEO of the Canadian Vehicle Manufacturers' Association (CVMA) says new tariffs threatened by U.S. President Donald Trump could devastate cities like Windsor if they become a reality. 

Brian Kingston says if the situation persists, it could tip North America into a recession.

"We're already seeing very concerning signs about the Canadian economy," Kingston said.

"If there are head winds and a potential recession, we will see vehicle sales decline. The moment that happens production is pulled back and ultimately, that will have employment impacts."

Canada is facing the possibility of 35 per cent tariffs on all Canadian goods that don't comply with CUSMA, the Canada-U.S.-Mexico Agreement, if a deal is not reached by Aug. 1. 

The new threats come just as Windsor has regained its status as the city with the highest unemployment rate in Canada. 

High unemployment

Statistics Canada places Windsor's unemployment rate at a seasonally adjusted three-month moving average of 11.2 per cent, up from 10.8 per cent in May and 9.1 per cent in June of 2024.

That's led to speculation about the impact of new tariffs on the automotive industry — a major employer for the Windsor region. 

"I think it is a big deal, but it's not a big deal," said Joy Nott, a partner with KPMG Canada who focuses on trade and customs.

"I think this is a negotiating tactic... [Canada] needs to not react to every negotiating tactic and we have to keep our eye on the prize."  

"We are going to have to live with whatever deal is struck," Nott added.

Meanwhile, the ever-changing tariff regime between Canada and the U.S. is creating less-than-ideal conditions for the automotive business, Kingston said.

"All American manufacturers have a North American footprint, and that's because we've had intentional policy through trade agreements," he said.

The time it is taking to secure a trade agreement is creating uncertainty for the sector, he added.

Nott said Canadians need to remain hopeful during current negotiations with the U.S. government.

"I think what we can hope for is that on both sides of the table there is a recognition of the agreements that Canada has had in place with the United States since 1965," Nott said.

"It makes more sense for the countries to build cars together than individually — there's a lot of common sense that falls into that."