No deal, higher tariffs: A new reality

CTV News

4 days ago

No one is surprised U.S. president Donald Trump hiked tariffs on all Canadian goods not covered by the Canada-U.S.-Mexico trade agreement from 25 to 35 percent.
'We hopefully will get to a point where Canada, the U.S. will have a solid trading relationship that is terror free,' Mayor Drew Dilkens told CTV News.
Ryan Donally concurred.
'A huge and very important relationship that needs to be ironed out between Canada and the U.S.,' he said.
The President of the Windsor-Essex Regional Chamber of Commerce said the uncertainty is keeping the auto industry from business as usual.
'Nobody's moving forward because they don't know what the pricing is going to be,' Donally noted.
'They don't know who's going to be incurring any of these costs and as a result it's affecting Windsor greatly.'
Dilkens pointed out the volatility is surfacing in the auto sector.
'You see Stellantis reporting billion-dollar quarterly losses, and the rest of the OEMs aren't far behind. That is just the signal that the pressure is building,' he said.
Dilkens warned that if the auto sector hits a tipping point, production cutbacks could happen, or the costs will be passed on to the consumers on both sides of the border.
'The U.S. has 4.2 per cent unemployment that by all economic standards is full employment in an economy. Where are they getting the people even if they can repatriate all the factories? We have to find a pathway that allows us both to win.'
Unifor Local 444 President James Stewart feels if the Canadian government had locked into an agreement similar to the one the U.S. brokered with the E.U., the writing would have been on the wall for the Assembly Plant.
'If we get locked into a bad deal long term, it is much worse than not having a deal, getting these 35 per cent tariffs in place,' he said.
'There's no way Stellantis, for example, here in Windsor, would pay a 15 per cent tariff. If you're talking billions of dollars a year, there's no way they could sustain that long term.'
He said the Detroit three, including Stellantis in Windsor, are breaking down the thousands of parts and providing proof they are compliant to the U.S., in order to lower tariffs as much as possible.
In the meantime, the last two months have been a rollercoaster, according to Stewart, with layoff weeks, smooth shifting weeks, and overtime opportunities at the Assembly Plant.
He said the government needs to leverage Canada's position as an important trade partner.
'The importance of what's happening on a national level and this trade agreement is more vital, I think, than most people realize,' Stewart said.
Donally is hopeful a good deal is within reach.
'Our economies are extremely tied together, so if it means that it takes a little bit more time to get a great deal for Canada, I very much support that. I'm sure our businesses also agree,' he said.