'Shock and disbelief:' Businesses in Windsor, Ont., brace for U.S. tariffs
U.S. President Donald Trump said Friday that the tariffs would take effect Saturday
The sales manager at a Windsor-based tool and manufacturing company says he's in "shock and disbelief" over news that U.S. President Donald Trump intends to proceed with a 25 per cent tariff on Canadian products Saturday.
Peter Gossmann of Cavalier Tool and Manufacturing Ltd. said he doesn't believe Trump has had enough time since his inauguration to assess the impact of the tariffs.
"None of us can afford to go to our customers and increase our prices by 25 per cent. That's going to have a major impact," Gossman said. "If it stays at 25 per cent, Canada's in big trouble."
White House press secretary Karoline Leavitt said Friday the president will put a 25 per cent tariff on Canada and Mexico and a 10 per cent tariff on goods from China Saturday.
Hours later, Trump told reporters in the oval office he expects the tariffs to include oil, gas, steel, aluminum, copper and microchips — but potentially with staggered dates and rates, depending on the product.
Vehicle production could stop, expert says
Gossman's company builds plastic injection moulds and other types of tooling for recreational vehicles, heavy trucks, consumer goods and other markets, including the automotive industry.
It will be less hard-hit than many, he said, because there is quite a lot of U.S. content in its products.
But he said the tariffs are bad news for Canada as a whole.
One auto industry expert said vehicle production could stop toward the middle or end of next week, as a result of the tariffs.
"The vehicle manufacturers don't want to build 'tariffed' vehicles," said Michael Robinet, vice president of forecast strategy for S&P Global Mobility.
"The parts suppliers, if they've got to start paying tariffs, they are not a bank, and they are not a charity. So if they cannot get someone to help pay for their tariff then they will stop production."
The chief financial officer of Windsor-based Dainty Foods said the tariffs could also have a significant impact on his company, which is Canada's only rice mill.
Dainty imports a lot of its rice from the U.S., Shawez Khan said, and earns much of its revenue from U.S. exports.
"If Canada ends up putting a tariff on incoming U.S. products, it will hit us even worse than everyone else," Khan said.
Canada needs to appease Trump, business owner says
"You will be paying the tariffs on imports, and then our customers will be paying tariffs on the exports. Which just means that we won't be able to compete in the U.S. market as effectively as we do right now."
That would force the company to rethink its growth strategy, Khan said.
He said he believes Canada should do whatever it needs to on border security to get Trump to call off the tariffs.
"It will be a few weeks before we really feel the impact … and we really hope that within those few weeks, we have effective negotiations with the Trump administration, and we get out of this situation," he said.
Windsor Mayor Drew Dilkens told CBC on Friday that a 25 per cent tariff could be catastrophic if it carries on for any length of time.
Dilkens leads a new Border Mayors Alliance that aims to unite border mayors in both countries against the tariffs.
Trump has said he wants to move Canadian auto manufacturing to Detroit, but Dilkens said it's impractical to move the entire supply chain to the other side of the border in a short period of time.
"Even if he does that, he's just going to increase the value of his own dollar, which is going to have a negative impact on all of the other trade that they hope to do around the world," he said.
The president of the Canadian Tooling and Machining Association said he believes Trump should be focusing his tariffs on Canada and the United States' common competitor: China.
North American auto manufacturing is so integrated, car components cross the border multiple times, Louis Jahn said.
A company in Windsor might buy components for tooling from the U.S., build the tooling for a dashboard, then ship it to the U.S. to make a part, he said.
And the countries could continue to hand the project back and forth and build on each other's work several times.
"If it was as simple as just saying "Oh OK, every time a part comes across that American border ... we're going to put 25 per cent on it,' ... that part would probably go up about 500 per cent," he said.
If the U.S. places tariffs on the Canadian tooling industry that make it cost prohibitive for auto makers to do business with them, it hurts its own auto sector, Jahn said.
"It's not going to redirect the flow of manufacturing into the United States because … the resources aren't available: the manpower, the training, the skills development."
ABOUT THE AUTHOR
