Detroit hit hard by US-Canada tensions
Detroit has become one of the hardest hit cities in the fallout of America's deteriorating relationship with Canada. The Michigan metropolis on Canada's border has seen traffic from neighboring Windsor drop and suffering businesses slash jobs.
Business leaders and elected officials are concerned that the White House's policies are forcing the sister cities into an unwanted 'break up.' 'It's a border that exists, but it's not anything that culturally has ever been an issue,' Ryan Donally, chief executive of the Windsor Essex Chamber of Commerce, told the Financial Times.
'So for this trade war... to start breaking down the social fabric between Detroit and Windsor, it's even more hurtful, because quite frankly, it's not just business, it's not just a tax,' Donally explained. 'This has damaged the cultural relationship between two best friends.'
One of the most critical links between Detroit and Windsor is the car industry, which is currently under a 25 percent tariff . Detroit, known as Motor City, has long been a destination for auto manufacturing and has welcomed substantial industry investment in recent years a fter suffering decades of decline.
However, the industry relies on cross-border collaboration. Companies such as Stellantis and Ford build car parts in Windsor and thousands of Canadians travel over the border every day to work in plants in Detroit.
Trump's car tariff has already led to layoffs in Windsor with some members of the Canadian Tooling & Machine Association cutting half their workers. Among them is Louis Jahn, owner of Jahn Engineering in Windsor, who has cut his 70-person staff by 20 percent after his orders from American carmakers disappeared due to the cost of tariffs.
Jahn told the FT that like many businesses he will be forced to raise prices. 'In the end, consumers are going to pay for it,' he said. As well as the car industry, 6,000 Canadian healthcare workers cross the border every day to work in Detroit's hospitals and doctors offices.
18 percent fewer people are arriving in the US via the Windsor-Detroit Tunnel compared to the same time last year, according to the Windsor-Detroit Tunnel Corporation. While commuting remains consistent, those traveling from Canada to Detroit to visit family or friends or for leisure has dipped.
Deteriorating relations also led Windsor mayor Drew Dilkens to cancel funding for an hourly bus service between the cities. It would cost the Canadian city $1.4 million a year to run, and Dilkens said Trump's rhetoric - including threatening to annex Canada into the 51st state - has made it impossible to ask for taxpayer money to fund it.
'We feel like we're under attack by the president of the United States,' he told the FT. Detroit is not the only border city that is feeling the sharp end of Trump tariffs. Buffalo and Niagara have both been hit by large downturns in Canadian visits.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
13 minutes ago
- BBC News
EU-UK trade deal: Ireland 'not exactly celebrating', minister of state says
Ireland is "not exactly celebrating" the new EU-US trade deal, an Irish minister has said, but added that it provides certainty. US President Donald Trump and European Commission Ursula von der Leyen announced on Sunday they have agreed a US tariff on all EU goods of 15%. That is half the 30% import tax rate Trump had threatened to implement starting on Friday. He said the 27-member bloc would open its markets to US exporters with zero per cent tariffs on certain Richmond, a minister of state in Ireland's foreign affairs department, said the deal "gives us that certainty that has been lacking in the last number of months". Among EU countries, Ireland is the most reliant on the US as an export market."We're not exactly celebrating this, it's not a case that this is a good thing but it's probably the least bad option based on what we were facing a couple of days ago, the prospect of a 30% tariff," Richmond told BBC Radio Ulster's Good Morning Ulster on Monday. "The EU is a tough negotiator but this isn't like any trade deal I have ever experienced before, in my 15 odd years of working on EU trade deals. It is what it is and we move on."He added: "We don't want a tariff war, tariffs are a bad thing. We want stability for businesses and we have that today."Trump has wielded tariffs against major US trade partners in a bid to reorder the global economy and trim the American trade der Leyen has hailed the deal, saying it will bring stability for both allies, who together account for almost a third of global EU's top official described the deal as a "framework" agreement, with further technical details to be negotiated "over the next weeks". Speaking of the pharmaceutical sector, Richmond said there was a "case made" that certain medications would be tariff free. "These are some of the areas we will have to dig into, but absolutely we have a lot to work on," he said. "The pharmaceutical sector isn't just really important to a lot of Irish businesses, it must be said it's really important to a lot of American consumers and crucially patients who rely on these drugs too." 'New era of stability' Speaking following the announcement, Taoiseach (Irish Prime Minister) Micheál Martin said the news of the trade deal is "very welcome".Martin said the fact that tariffs would still be higher than before would make trade "more expensive and more challenging".However, he added that the agreement will bring "a new era of stability" and will "help protect many jobs in Ireland".Speaking to Good Morning Ulster on Monday, former UK ambassador to the US Lord Kim Darroch said: "As an outcome, it's a relief I guess for everyone in the European Union that it's not worse, but this isn't anything for great celebration, this is a backwards step."In 2024, Ireland exported goods worth £60.4bn ($81.1bn) to the commission has the mandate to negotiate trade deals for the entire bloc - but it still requires approval by EU member states, whose ambassadors will meet on Monday for a debrief from the commission.
Reuters
16 minutes ago
- Reuters
Oil steadies as investors assess US-EU deal
LONDON, July 28 (Reuters) - Oil prices edged higher on Monday as investors assessed a trade deal between the United States and the European Union, while a stronger US dollar and lower oil imports by India weighed on prices. Brent crude futures were up 30 cents, or 0.4%, to $68.74 a barrel by 0813 GMT, while U.S. West Texas Intermediate crude stood at $65.43 a barrel, up 27 cents, or 0.4%. The U.S.-European Union trade deal and a possible extension in the U.S.-China tariff pause are supporting global financial markets and oil prices, IG markets analyst Tony Sycamore said. Sunday's U.S.-EU framework trade pact sets an import tariff of 15% on most EU goods, while U.S. President Trump said the deal calls for $750 billion of EU purchases of U.S. energy in coming years. Senior U.S. and Chinese officials will meet in Stockholm on Monday, aiming to extend a tariff truce before an August 12 deadline. Oil pared most of its gains on Monday after Brent futures rose above $69 a barrel earlier in the day. Oil retreated from those levels as focus shifted to a stronger US dollar and lower oil imports by India, following the removal of another uncertainty with the US-EU deal, PVM analyst Tamas Varga said. On the supply side, an OPEC+ panel is unlikely to alter existing plans to raise oil output when it meets on Monday, four OPEC+ delegates told Reuters on July 25. ING expects OPEC+ will at least complete the full return of 2.2 million barrels per day of the additional voluntary supply cuts by the end of September. Also on the supply side, Venezuela's state-run oil company PDVSA is readying to resume work, once Trump reinstates authorisations for its partners to operate and export oil under swaps, company sources said. In the Middle East, Yemen's Houthis said on Sunday they would target ships of companies that do business with Israeli ports, regardless of nationality, in what they called a fourth phase of military operations against Israel over the Gaza conflict.
Reuters
16 minutes ago
- Reuters
Europe Inc swerves Trump trade war 'hurricane' but laments higher tariffs
LONDON, July 28 (Reuters) - European companies were left wondering on Monday whether to cheer a hard-won U.S. trade deal or lament a still sharp jump in tariffs versus those in place before President Donald Trump's second term. A day earlier, European leaders heralded a framework trade deal with the United States that would impose a 15% import tariff on most EU goods, averting a spiralling battle between two allies which account for almost a third of global trade. Although the deal is better than the 30% rate threatened by Trump and will bring clarity for European makers of cars, planes and chemicals, the 15% baseline tariff is well above initial hopes of a zero-for-zero agreement. It is also higher than the U.S. import tariff rate last year of around 2.5%. "Those who expect a hurricane are grateful for a storm," said Wolfgang Große Entrup, head of the German Chemical Industry Association VCI, calling for more talks to reduce tariffs that he said were "too high" for Europe's chemical industry. "Further escalation has been avoided. Nevertheless, the price is high for both sides. European exports are losing competitiveness. U.S. customers are paying the tariffs." The deal, which also includes $600 billion of EU investments in the United States and $750 billion of EU purchases of U.S. energy over Trump's second term, includes some exemptions, even if details are still to be ironed out. Carmakers Volkswagen ( opens new tab and Stellantis ( opens new tab, among others, will face the 15% tariff, down from 25% under the global levy imposed by Trump in April. Stellantis shares rose 3.5% and car parts maker Valeo ( opens new tab was up 4.7% in early trade. German pharma group Merck KGaA ( opens new tab gained 2.9%. Aircraft and aircraft parts will be exempt - good news for French planemaker Airbus ( opens new tab - as will certain chemicals, some generic drugs, semiconductor equipment, some farm products, natural resources and critical raw materials. Shares in the world's biggest chip maker ASML ( opens new tab rose more than 4%, among the biggest gainers on the pan-European STOXX 600 (.STOXX), opens new tab index. Dutch brewer Heineken ( opens new tab cheered the deal, with CEO Dolf van den Brink welcoming the certainty it brought. The world's No.2 brewer sends beer, especially its namesake lager, to the U.S. from Europe and Mexico, and has also suffered from the indirect effect on consumer confidence in important markets like Brazil. The rate on spirits that could impact firms such as Diageo (DGE.L), opens new tab, Pernod Ricard ( opens new tab and LVMH ( opens new tab, is still being negotiated though. "It seems that in coming days there could be negotiations for certain agricultural products, zero for zero, which is what the European and U.S. sectors have been calling for," said Jose Luis Benitez, director of the Spanish Wine Federation. Benitez added that a 15% rate could put Europe at a disadvantage versus other wine exporting regions subject to 10% tariffs. "If there are any exceptions, we hope that the (European) Commission understands that wine should be one of them." Lamberto Frescobaldi, the president of Italian wine body UIV, said on Sunday that 15% tariffs on wine would result in a loss of 317 million euros ($372.63 million) over the next 12 months, though the group was waiting to see the final deal text. Others said that the agreement- which followed on the heels of a similar one with Japan - helped bring greater clarity for company leaders, but still threatened to make European firms less competitive. "While this agreement puts an end to uncertainty, it poses a significant threat to the competitiveness of the French cosmetics industry," said Emmanuel Guichard, secretary general of French cosmetics association FEBEA, which counts L'Oreal ( opens new tab, LVMH ( opens new tab and Clarins among its members. ($1 = 0.8507 euros)
