Trump's tariffs forge ‘feeling of big betrayal' in Canada's manufacturing

Al Jazeera

6 days ago

Krysten Lawton, 53, works in health and safety at Ford Motor Company of Canada's engine plant in Windsor, Ontario — mere blocks from the Detroit River — where she has worked for 30 years.
Lawton is a fourth-generation auto worker in Windsor, an industrial hub abutting Canada's US border near Detroit.
Her great-grandfather, both grandfathers and her father all worked for Ford, which employs her, her husband and their oldest son.
'These are really good-paying jobs,' Lawton says of the factory, where she currently works in health and safety.
'This is life-changing for people to work here.'
Windsor employs more people in manufacturing jobs than in any other sector — 19 percent of its workforce. Those workers and employers in Canada's industrial heartland are now rattled by tariff threats.
In March, United States President Donald Trump imposed 25 percent tariffs on steel and aluminium, and weeks later, the same on automobiles. In June, he doubled steel and aluminium duties. And now, he is threatening to tax copper at 50 percent starting Friday.
That's Trump's deadline for Canada's Prime Minister Mark Carney to reach a deal or face 35 percent tariffs on all goods deemed not compliant with the 2020 US-Mexico-Canada Agreement (USMCA), atop previous duties.
Last Friday, Trump threw cold water on Canadians' hopes for reprieve.
'Canada could be one where they'll just pay tariffs,' Trump said. 'It's not really a negotiation.'
Facing the same deadline, the European Union agreed on Sunday to accept 15 percent duties on most European exports.
US and Canadian manufacturers, long interconnected, are bracing for the worst — as are industry-dependent communities.
'Volatility continues to be the new certainty,' said Alex Greco, senior director of manufacturing at the Canadian Chamber of Commerce.
Loss of confidence
Trump's first tariffs had Lawton's coworkers 'all on edge', she says.
Her plant makes engines for factories in the US states of Kentucky, Ohio and Michigan, with some components sourced globally.
'It definitely has real human impact,' she said, 'especially in our region … the manufacturing hub of all Canada.'
Canadian manufacturers employ 1.7 million people, exceeding one-tenth of the country's gross domestic product, and last year exported to the US 356 billion Canadian dollars ($257bn US) of goods they produced, with 530,000 manufacturing jobs directly tied to exports.
Passenger vehicles and parts made up 62 billion Canadian dollars ($45bn) of that, exceeding 30,000 direct export-dependent jobs. Canada exported 13 billion Canadian dollars ($9bn) of domestically manufactured aluminium — representing nearly 10,000 jobs — and 8.4 billion Canadian dollars ($6bn) of steel and iron, nearly 6,000 jobs.
Trump's volatile approach 'just creates a chill on overall investment', Greco said, 'eroding confidence in cross-border supply chains', freezing many companies' expansion plans.
Official data lags on job impacts. But thousands have already been laid off across the automotive and metals industries this year.
Canada's gross domestic product (GDP) fell in April, mostly in manufacturing, a 'significant impact already', said Centre for Future Work director and economist Jim Stanford.
'The tariffs themselves, and probably more importantly the uncertainty around the tariffs, is definitely hitting home,' he said.
Trump's tariff whims have sparked anxiety amongst workers, employers and voters — just 11 percent of whom believe Trump negotiates in 'good faith'.
But despite layoffs and slowdowns, the damage could be worse, said Catherine Connelly, head of McMaster University's Centre for Research on Employment and Work.
Without mass layoffs or inflationary changes, employment is actually up, she noted.
'We're in the stage of anything can happen,' said the business professor in Hamilton, Ontario. 'But it's starting to look like we're going to have some kind of tariffs.
'No business has ever wanted anything like this.'
Auto sector 'going to hurt' if tariffs stay
Car factories by the Michigan-Ontario border are increasingly entangled since the 1965 Canada-US Auto Pact.
'We had 60 years of integration,' said McGill University economics lecturer Julian Vikan Karaguesian, who worked in Canada's finance ministry on trade issues, including in Canada's US embassy.
'If these tariffs are sustained, it's going to hurt.'
John D'Agnolo, chair of Unifor's Auto Industry Council, notes that workers are fretting — especially younger ones with less seniority protections and rising expenses.
'It's a scary thing,' the longtime Ford employee and unionist said. 'They're worried.
'They've got to make sure they can take care of their families.'
Industry slowdowns would 'ripple' across auto-dependent regions, Greco said.
'Companies will have to make very tough decisions,' he said. 'There's still a threat of, potentially, a recession.'
A silver lining, experts say, is exemptions for North American-made parts.
'In theory, the US tariff on cars is supposed to make an adjustment for US-made content in the car,' said Stanford. 'But in practice … industry are just scratching their heads.'
'Cascading impacts'
Even for USMCA-compliant auto parts, tariffs on raw metals for cars will have 'cascading impacts', Greco said.
One-quarter of imported US steel is Canadian, and over half of its imported aluminium.
In Ontario, 'the heart' of Canada's metal industry, one region hosts one-third of the provincial sector's workforce.
The peninsula around Hamilton, Canada's 'steel capital', employs nearly 12,000 people in metal manufacturing.
'Hamiltonians in particular are concerned about steel; it's a huge industry,' said Connelly. 'The companies, they're extraordinarily resilient.
'But nobody ever thought that something like this would ever happen. It's certainly quite a shock.'
The United Steelworkers represent tens of thousands of metalworkers. Its national union director for Canada, Marty Warren, warns that 'a whole lot is at stake' for members, who produce products 'from when you're born to caskets for your last day'.
Tariffs have many of his members fearful for their futures in 'great-paying jobs' that 'support communities'.
'It's definitely set off some panic,' he noted. 'There's fear throughout the membership: 'Should I be saving my money for darker times?''
On July 16, Carney imposed his own steel tariffs on several countries, to 'ensure Canadian steel producers are more competitive'.
Unions want the Canadian prime minister to do more to protect domestic industries.
'Because at the end of the day,' Warren quipped, 'what's a nation without a domestic steel industry?'
Labour movement divided
One thorn for Canada's highly unionised manufacturing sector: Some US labour leaders back Trump's 'America First' economic agenda. The United Auto Workers head endorsed 'bringing back American jobs'.
'Are we shocked by it?' asked D'Agnolo. 'Of course we are, because we work well together.'
Ford employee Lawton is less diplomatic, calling pro-tariff leaders 'chameleons' for their shifting stances on Trump.
'Within the unions, you have people that will support him one day and … against him the next,' she said. 'It actually would impact the US much greater than it would impact us.
Lawton sneers at the idea that US jobs went to Canada, where Ford opened a plant in 1905.
'We have never taken any American jobs,' she said. 'But when you hear it over and over and over again, you start to believe it.'
Trump harnessed 'a feeling of big betrayal' among blue-collar Americans after decades of declining manufacturing, argues Karaguesian. 'It's not clear he'll be able to tariff his way back to America being a big manufacturer,' he said. 'Shortcuts rarely work.'
'You have to be able to bounce'
Karaguesian worked under Carney in Canada's finance department before he headed the Bank of Canada.
He sees Carney as 'very clever economically and politically and strategically', even though 'he's been dealt a very hard hand of cards'.
Carney will have to compromise, but not at any cost.
'If we want to remain a sovereign nation,' Karaguesian said, 'we will have to draw a line in the sand.'
A poll found two-thirds of Canadians want Carney to 'take a hard approach, refusing difficult concessions'.
In auto-dependent Windsor, Lawton calls manufacturing 'a roller coaster'.
'Buying my first house, thinking about starting a family, and then bang — you get a layoff,' she recalled.
She worries most for young workers. To weather manufacturing's storms, she urges her kids to diversify their skills, and not depend on one income source.
She'd give Carney similar advice.
'You have to be able to bounce,' she said. 'Automotive is not something that I wish for my boys because of the roller coaster ride.
'I tell them all the time, 'You got to save your pennies, man, because you just don't know.''