Canadian manufacturers who grew up in Canada-U.S. free-trade peacetime are quickly learning about tariff complexities — and pain — as the two nations exchange salvos on steel and aluminum, and U.S. president Donald Trump threatens to slap a 25-percent levy on vehicles and parts.
This story by Rob Bostelaar originally appeared in Automotive News Canada.
Already, Canadian steel producers are laying off workers as U.S. customers scale back or cancel orders because of U.S. import charges that went into effect in June.
Now, Canadian auto-parts makers who buy steel from the U.S., are feeling the impact of Canada’s counter levies launched July 1 with accompanying financial aid for metal producers.
“Some companies have said to me that in orders of magnitude, the Canadian tariffs hurt them twice as much as the American tariffs, simply because of the types of steels (that they require),” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association of Canada.
Volpe said many companies buy stainless steel and other specialty steels from American suppliers because those products aren’t available in volume from Canadian mills.
Even companies that use regular steel are getting hit because their supply contracts require them to buy from U.S. distributors where the automakers have negotiated better prices. In some cases, the automaker is covering the higher cost, but “when you’re the purchaser of record, you’ve got no choice but to absorb it.”