Donald Trump’s swearing-in will take place on Monday. However, players in the Canadian automobile industry are worried about the tariffs that the American president could impose.
He has declared on several occasions that he intends to impose customs tariffs on products coming from Canada.
If Mr. Trump were to walk the talk, the industry would be shut down
simply believes the president of the Automotive Parts Manufacturers Association of Canada, Flavio Volpe.
He states that the profit margin in the industry is minimal
. According to him, customs tariffs between 1% and 10% would already be catastrophic for certain companies. If President Trump moves forward with 25% tariffs on Canadian products entering the United States, all profits would be eliminated and each vehicle built would generate financial losses
he laments.
The owner of the tool manufacturer Jahn EngineeringLouis Jahn, believes that the president-elect is missing his target: It’s ironic that the president is focusing on Canada and Mexico, we are partners, not competitors. China is our competitor
.
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Louis Jahn runs Jahn Engineering, which is located in Tecumseh in southwestern Ontario.
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In the same breath, Mr. Jahn – who is also the president of the Canadian Tooling & Machining Association [CTMA, Association canadienne de l’outillage et de l’usinage, traduction libre] – emphasizes that the measure could weaken the manufacturing sector and make Canada and the United States more vulnerable. In a conflict situation, we can transform our industry to produce military components. If they need weapons quickly, they need our equipment, our technology.
Today, his company must prepare for the consequences that these tariffs could have on the export of Canadian products to the United States.
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-Some materials, such as plastic resin, are only available from U.S. suppliers.
Photo : - / Katherine Brulotte
Profit margins are so thin, he says, that companies that are members of the CTMA considered delivering incomplete tools to customers before Donald Trump entered the White House, then bringing them back to Canada to complete them under the conditions of the guarantee.
The culture of just in time
of the industry makes medium-term risk management very complex according to the president of the industrial mold manufacturer Circle 5 Saylo Lam. He is also the president of the Canadian Association of Moldmakers [CAMM, Association canadienne des fabricants de moules industriels, traduction libre].
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Saylo Lam runs the Circle 5 mold manufacturing company.
Photo : - / Katherine Brulotte
According to him, the economic integration of the automotive industries of Canada, the United States and Mexico is such that borders are almost non-existent: We use the same currency, the same standards
.
Without even knowing the terms envisaged by Donald Trump for the possible imposition of these tariffs, they have already had an economic impact in the region, according to the investment agency Invest Windsor-Essex.
The president of the agency, Joe Goncalves is working to reassure potential investors who could modify their projects or move them south of the border. He claims that the signing of contracts for the purchase of land have already been postponed. Efforts are now aimed at attracting investments that would depend less on the relationship between Canada and its neighbor.
