Latest news with #U.S.-Canada-MexicoAgreement
Business Mayor
14-05-2025
- Automotive
- Business Mayor
Could the tariff spat upend Canada's electric vehicle future?
Electric vehicles on a manufacturing lots (photo: Shutterstock) The North American automotive manufacturing market is one of the most integrated in the world. It has been built up over sixty years of cooperation between Canada and the United States, from the Automotive Product Agreement (1965) that set the groundwork for U.S./Canada Free Trade Agreement (1989) to the later North American Free Trade Agreement (1997) and, in 2020, when it was renegotiated as the U.S.-Canada-Mexico Agreement (USMCA). Critical parts needed to make vehicles may cross the Canadian and U.S. border several times—leveraging economies of scale, just-in-time-manufacturing, and country-specific expertise—before they are used in producing vehicles in Canada, the U.S. and Mexico. With the transition to electric vehicles, the same mechanisms are used in manufacturing and automotive companies are investing heavily in building new plants and manufacturing facilities to produce the batteries and other critical components. The province of Ontario and the Federal Government have made significant investments in electric vehicle manufacturing in Canada. In April of last year, Premier Doug Ford and then-Prime Minister Justin Trudeau stood together as Honda announced it would make a $15-billion electric vehicle investment in Ontario to build four new manufacturing plants that included Honda's first electric vehicle assembly plant and a new stand-alone EV battery plant at Honda's facility in Alliston, Ont. Hanon Systems, a global automotive parts supplier, announced last year that it would be investing $155 million to build a new 284,200-sq.-ft. facility in Woodbridge, Ont. to manufacture critical components for electric vehicles. These investments are driven by the growing adoption of electric vehicles on both sides of the border. In Canada , S&P Global Mobility reports that adoption of zero-emissions vehicles continued to grow last year with Canada hitting an 15.2% zero-emissions vehicle adoption rate for the year. This rapid adoption has driven a robust growth in electric vehicle chargers across Canada, with Natural Resources Canada (NRCan) reporting in the last 12 months Canada saw 6,586 new public charging ports at 1,559 new stations across the country. Read More Top 10 best mid-sized electric cars 2023 Tariffs, the great disruptor The industry's growth is now under threat from U.S. President Trump's announcement that he will impose a 25% tariff on goods and autos coming from Canada into the United States—and he has not ruled out making those tariffs higher. One of the stated goals of the tariffs (reasons for the tariffs seem to change often) is to bring auto manufacturing back to the United States. While all analysts say such a desire is near impossible and prohibitively expensive with how integrated the industry is, and would bring any real benefits to vehicle buyers, the threat alone has created anxiety in the industry. 'I would say the North American auto industry as a whole is really suffering from this trade war, and all the uncertainty that it is creating,' says Joanna Kyriazis, director of public affairs and clean transportation lead with Clean Energy Canada. 'Everything, from vehicle assembly plants and vehicle parts manufacturers are all getting hurt in this trade war. And Canada's electric vehicle and battery manufacturing industry is particularly vulnerable because it is just starting to get off the ground. It is important to remember that Canada's electric vehicle and battery industry is of strategic importance for our country and integral to our long-term competitiveness.' Kyriazis adds the constant threats of tariffs is starting to cause worries amongst manufacturers and parts suppliers across the entire automotive manufacturing industry in North America. Tariffs would disrupt critical supply chains, especially those that supply the key components. 'It is creating a lot of concerns when it comes to investments in Canada's auto sector, concerns that those investments could flee and go to the U.S.,' she adds. Read More Abarth 600 to arrive by 2025 as brand's second hot EV
CBC
03-04-2025
- Business
- CBC
No new tariffs for Canada. But uncertainty causes London businesses to 'play defensively'
Although Canada has been spared in U.S. President Donald Trump's latest tariff announcement, businesses in London say there's still uncertainty around what comes next and it's made it hard for them to plan ahead. Trump on Wednesday announced a set of global reciprocal tariffs on imports from dozens of countries, including "a minimum baseline tariff of 10 per cent" on all goods coming into the U.S. However, goods compliant with the U.S.-Canada-Mexico Agreement (USMCA) will be exempt. The White House said there will be no more across-the-board levies applied to Canada than what has previously been announced and no additional baseline tariffs. But Trump did go ahead with slapping 25 per cent tariffs on all fully assembled foreign-made vehicles and some parts. The changes will have a profound impact on the local economy as businesses struggle to make decisions around orders, suppliers and staff, said Graham Henderson, head of London's Chamber of Commerce. "One thing is clear — it's not good for the markets, it's not good for business confidence, it's not good for the consumer, it's not good for anybody," he said. "London is a bigger manufacturing hub than I think many people give us credit for. So, this is absolutely having an impact on London and we know already there's layoffs taking place and that people aren't placing orders because they're uncertain of the price." Trump slapped a 25 per cent tariff on Canadian goods (and 10 per cent on energy) last month, supposedly in response to drugs and migrants coming into the U.S. across the northern border, but made some exceptions for importers who can prove the products they're bringing in from Canada are compliant with USMCA. Will Willemsen's Sunripe Freshmarket has two locations in London and one in Sarnia. The independent grocer buys lots of fruits and vegetables from the U.S., but Willemsen said fluctuating tariff announcements are disrupting already struggling supply chains from the COVID pandemic. "I think everyone's just confused and a lot of contracts are getting cancelled because no one really knows what's going to happen," he said about some suppliers he's dealt with. "There's a lot of variables here and what happens is that you just shut down. You don't want to make any investments or take any risks so instead of playing offensively, you play defensively." Willemsen said he's purchased oranges from Florida for many years, but has recently started buying them from Egypt and Morocco instead, adding that he's trying to find more Canadian and European suppliers. London planning to reduce red-tape for businesses Tariffs placed on Canadian steel and aluminum also remain in place and some local craft breweries are concerned it will drive up the cost of their input materials. "Luckily, we do source most of our grain from Canada but it would be cans with the aluminum tariffs that the prices could definitely go up, or the supply chain could get disrupted." said Gavin Anderson, president of Anderson Craft Ales in London. "We've just been trying to make sure that we have Canadian supplies lined up and ready to go, and just have a stockpile of cans to make it through the next little while, and hopefully this gets sorted out soon. But I don't think there's any guarantee of that." In an effort to support the local economy, the City of London plans to update its Industrial Land Development Strategy to use that land for companies provincial and federal governments are trying to recruit to Canada. The city also wants to amend zoning bylaws that would reduce red tape for home-based businesses, such as meal boxes and tiffin services. "Let's bring those jobs here to London. This is something we can do to turn a difficult situation into a great opportunity," said Mayor Josh Morgan. Both directives require full council approval. "We know the economy is likely to struggle through any sort of trade dispute, so we want to bolster the economy at the base level, including for those who are trying to make a couple extra dollars by doing some home-based businesses, particularly in the food sector." Meanwhile Willemsen's biggest worry is how the Canadian government will respond because reciprocal tariffs on imported American goods will increase costs for him and his customers. "The one thing they shouldn't tax is food because the average person is already struggling and if they're going to apply taxes, they should do it on other commodities except food," he said.
