Auto manufacturers in southwestern Ontario warn of 'catastrophic' impacts from Trump tariffs

Auto parts manufacturers in southwestern Ontario say punitive tariffs imposed by the American government could bring automotive production to a halt by the end of this week and will have devastating impacts on the overall supply chain. 

On Saturday, U.S. President Donald Trump launched a trade war by imposing 25 per cent tariffs on most Canadian goods and 10 per cent tariff on Canadian energy products. 

The levies, slated to take effect on Tuesday, will leave tens of thousands of workers on both sides of the border jobless, said Mike Van Boekel, union representative at the General Motors CAMI plant in Ingersoll, Ont. 

"It'll be up to the companies, but I could see pretty well every auto plant potentially closing in Canada within a week," said Van Boekel, whose Unifor Local 88 represents approximately 1,200 auto workers. 

"We supply a lot of big factories with auto parts, and if they can't get those parts, they will shut down too. A lot of what President Trump's trying to do could really go backwards and put his own workforce on the unemployment lines by the end of next week." 

Van Boekel said 90 per cent of vehicles at CAMI are shipped south of the border. He said he anticipates the tariffs can cause auto companies to end contracts with Canadian manufacturers.

"It's not just concerning for auto companies, but also suppliers and manufacturers. The parts sector makes a lot of components for vehicles that are built in the US and we do a lot with engines in our country."  

WATCH | Ontario auto-parts maker says tariffs could be detrimental for sector:

Ontario auto parts maker says impacts from U.S. tariffs will show immediately

8 hours ago

Duration 1:19

Etienne Borm of ETBO Tool & Die ships his products to the U.S. daily. He believes tariffs will bring auto manufacturing to a halt in the days to come.

The tariffs are expected to remain in place until Trump is satisfied Canada is doing enough to stop the flow of fentanyl and illegal immigration into the U.S., according to a fact sheet from the White House. Ottawa has said Canada is responsible for less than 1 per cent of fentanyl entering the U.S. 

Prime Minister Justin Trudeau said Saturday night that Canada will slap 25 per cent retaliatory tariffs on $155 billion worth of American goods. There will be an immediate $30 billion implemented on Tuesday, and the remaining $125 billion in 21 days.

'This is an everyone problem' 

Some of those items include American beer, wine, bourbon, fruit juices and consumer products like furniture and sports equipment, along with others. Several Canadian provinces, including Ontario, have also banned American liquor from their shelves in response.

"It's a sad day for the US-Canadian trade relationship. I think it has the ability to be catastrophic for our business and sector," said Etienne Borm, president and owner of ETBO Tool & Die Inc., a second generation family-owned business in Aylmer, Ont., that produces auto parts.

All of ETBO's products are shipped to the U.S. daily, with 30 per cent exported directly to American facilities and the remainder through sub-suppliers, Borm said, adding that the tariffs could bring a significant reduction to Canada's manufacturing footprint. 

"If this goes on and it's a permanent thing then this is the beginning of a real struggling time for Canadian industry and this isn't limited to the auto sector, this truly is an everyone problem" he said. "We ship to the U.S. everyday so I expect the impacts to start showing up Tuesday."  

The tariffs can be a chance for Canada to strengthen its local supply and chain, according to Jason Bates, general manager of London Region Manufacturing Council.

"In the London region, 85 to 90 per cent of goods we make are exported and the vast majority of those go to the United States, so the effect will be large. It's going to create an impediment to selling competitively in the United States for manufacturers in Canada," Bates said. 

"Supply chains and business across Canada can be vastly improved, there has been a lack of creating a domestic supply chain, so this could be an opportunity to do that."

Although Bates agrees with the need for Canada to respond to the U.S., he believes retaliatory tariffs "will affect the cost of materials from the United States that are put into Canadian products, creating a double-edged sword," he said. 

Van Boekel said workers are concerned because it's unclear how long the tariffs will be in place. Although workers will be paid a percentage of their wages, he worries high inflation will cause them to feel the pinch right away. 

Borm will look at how to tighten up costs and discretionary spending, while assessing the economic impacts for his 200 employees. Despite the uncertainty, standing together as a nation is the way to get through it, he said. 

"We have a lot to offer as a country, we're a smart, civilized country with great technology, and I think we have to negotiate with the power of strength and unity. I'm confident there will be a deal here, we just need to let calmer heads prevail."